Knight Asia, the Asian arm of US-based agency brokerage Knight Capital, will start trading in nine markets in Asia from today, as it looks to establish a presence in the region.
The firm has been approved for membership to the Hong Kong Stock Exchange (HKEx), and will access markets in Japan, Singapore, Malaysia, Thailand, Indonesia, Philippines, Australia and New Zealand electronically through other brokers while it establishes its own remote connections.
“We have taken a measured approach to setting up in Asia,” Kyle Stewart, managing director, head of institutional Asian equities, Knight Asia, told theTRADEnews.com. “After the internet bubble burst; DMA, best execution and unbundling fundamentally changed the business in the US and Europe. Those changes have been slow to move to Asia, but we believe they are coming and that the recent market turmoil will be a catalyst. Most sell-side firms in Asia were structured to distribute research, meaning execution was really an afterthought. Knight’s opportunity in Asia is that we can start from a blank sheet of paper and build a business that is exclusively focused on providing customers with the highest quality executions.”
Knight Asia will initially focus on voice trading before looking to offer electronic market access.
“Once we have established the core of our voice business here in Hong Kong, we will expand into other regional markets. With a regional footprint we can add other business such as program trading and sophisticated electronic services to our offering,” said Stewart. “Given the nature of the region, it will take a while to build our footprint. In the meantime, we believe that given our structure and the quality of hires, we should provide a better voice service then is currently being offered in the region.”
Knight Asia’s operations will be structured along similar lines as Knight Capital’s European and US units. As well as sales traders, the firm will staff a senior trading desk with traders that have a general knowledge of the region and whom will be responsible for value-added services.
“We have hired four senior position traders with extensive experience who will execute client orders on a sector based model,” explained Stewart. “We think this will add sufficient value overall but also allows our sales traders to focus on the needs of our customers.”
Stewart confirmed that Knight Asia hopes to gain remote access to the Japanese and Australian markets within the next few months.