Singapore exchange to increase presence in China market

Singapore Exchange Ltd, Southeast Asia's biggest bourse, will hire more people in China as it seeks to sell more of its products in Asia's largest equities market, Chief Executive Officer Magnus Bocker said.

SGX will appoint a senior executive in China to build its business and relationships, Bocker said in an interview last week. The bourse posted its first quarterly profit growth in more than a year in the third quarter of 2014 after a world-beating rally in Chinese stocks spurred demand for hedging instruments. Revenue from derivatives jumped 46 percent, spurred by a 183 percent surge in volume on Chinese stock futures, according to the exchange.

SGX wants more global investors to use its Chinese products, "whether it's China A50, indexes or commodities," Bocker, 53, said at SGX headquarters. "We need to grow our headcount in China. We will more than double what we have today in the next few years."

Bocker said that SGX's performance will depend on its ability to attract new clients and sell more products to existing customers, emphasizing the need to have a presence in key markets. The bourse has sales and marketing offices in Beijing, Hong Kong, Tokyo, Mumbai and London.

Longer term, the exchange will look at opportunities to tap North America, the world's biggest derivatives market, Bocker said.

"The number of new clients using our products is very high and we're not losing the old ones," Bocker said.

Growth opportunities

Derivatives transactions climbed 52 percent to 40 million in the fiscal second quarter, with trading of FTSE China A50 futures increasing to more than 17 million contracts, according to SGX. China A50 contracts, which track the country's 50 biggest stocks, along with those for Japan, India and iron ore, are among SGX's most actively traded derivatives.

There are about 40 companies seeking approval from the US Securities and Exchange Commission to introduce exchange-traded funds that will invest in the China stock market and these ETF providers would be potential clients for A50 futures, Bocker said.

Bond platform

The Southeast Asian bourse plans to start a bond trading platform by the middle of this year, to complement its equities, commodities and foreign-exchange products.