The Stock Exchange of Thailand (SET) has committed to facilitating greater levels of algorithmic trading on its market, after reporting a significant rise in electronic trading flow during the first half of 2010.
SET reported that 2.36% of total trading by value on the exchange was directed using algorithms, more than double the 0.9% recorded over the whole of 2009.
Vichate Tantiwanich, chief marketing officer at SET, says the exchange is aiming to bring its standards for electronic trading in line with other international markets to further boost the amount of trading executed using algorithms.
“The share of algorithmic trading is still lower than in developed exchanges, where the figure is over 20%,” said Tantiwanich. “Nevertheless, we expect that algorithmic trading will receive greater attention in the near future, since SET has improved market access e.g. by improving order transmission to support brokerage firms having high trading value, or linking trading systems using the FIX protocol, which is in line with international standards that will facilitate trading orders of institutional investors through direct market access.”
Tantiwanich added that foreign firms, including pension funds, mutual funds and institutional investors, were the most frequent users of algorithmic strategies on SET. The exchange has also amended its rules for trading surveillance to be further aligned with international standards and encourage further electronic trading growth.
The growth in algo flow in Thailand comes in addition to an increase in overall trading volume on SET. According to data vendor Thomson Reuters' Equity Market Share Reporter, SET traded US$185.64 million in July 2010, its highest trading turnover for over a year and an increase from June 2010's total of US$46.8 million.