Trading and volumes in Japan are no a flash in the pan according to CLSA’s head of trading Andy Maynard.
“Japan is crazy at the moment. The volumes that are going through that market are colossal. I think it’s a medium term event. I know it’s the first time in 15 years we’ve seen it but it seems real to me. It’s proper, big order flow with big positions that are getting added.”
He was speaking at a recent roundtable event in Hong Kong organised by Fidessa and moderated by Steve Grob, Fidessa’s director of group strategy.
“I think this is institutions catching up on being underweight. Peripheral Asian players or global wealth management books that have been saying ‘Oh no forget Asia. Look at Toyota, lets buy half a billion dollars’.”
Beyond Japan, he sees investor demand focusing on cash products in preference to synthetics. Is that influenced by the demand of domestic Asia versus international investors?
“You’ve got to look at each market separately because each domestic Asian market is different. If foreigners were thrown out of Korea tomorrow, would they care? They wouldn’t lose sleep over it. If foreigners were thrown out of Hong Kong tomorrow, it’d be catastrophic.”
Responding to a point that there is a paranoia that drives the markets to be run in an orderly fashion for the benefit of retail investors, Macquarie’s Rob Laible noted that 60% of Asian markets are dominated by retail.
“If you add warrants in to Hong Kong, it’s even bigger than that,” responded Maynard. “Korea, Taiwan, China, they’re casinos. It’s day trading. We take investors to Taiwan or especially to China, walk them into a really local broker and just watch because it’s incredible to see. There’s a wall of TV screens, everybody’s chain smoking, everybody’s got a little hand held palm thing.”