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Finding the right strategy for the Asian markets. By Thomas Book

Release date: 30 Nov 2018 | Eurex Exchange, Eurex Clearing

Finding the right strategy for the Asian markets. By Thomas Book

Absorb what is useful, reject what is useless, add what is specifically your own.

Coming back from a short trip to Singapore, attending FIA Asia, I was thinking about the variety of impressions I once again got from this amazing, not easy to grasp part of the world. It already starts with the fact that what we, simply out of convenience, call Asia does not really exist. Instead, we have many individual markets with different challenges and opportunities.

But there is one thing all these states have in common – a tremendous growth and development in nearly every area, be it private banking, derivatives, FX, commodities and, more recently, FinTech. All of this offers great opportunities for us if we come up with innovative products and services and a convincing strategy.

True, we have at an early stage already anticipated the important role Asia-Pacific would play on global financial markets, but we may have underestimated the pace of the development in this area. Asia is expected to grow by around 5.5 percent this year, accounting for nearly two-thirds of global growth, and the region remains the world’s most dynamic by a considerable margin.

The global economy is becoming increasingly digitized, and some of the emerging technologies have the potential to be truly transformative, even as they pose new challenges. Here again, Asia is already a leader in many aspects, and especially when it comes to blockchain technology and digital currencies countries like Japan or Singapore are definitely on the forefront.

But we are well positioned to tackle these challenges and play our trump cards:

  • intensify our mutually beneficial partnerships with Asian infrastructure providers, regulators and market participants
  • Placed right between the Asian and US time zones, we are the ideal place for hedging of Euro exposure.
  • We have a comprehensive offering for the Asian market from trading and clearing to technology and risk management.
  • Our MSCI product range creates hedging opportunities for worldwide investment risks. Close to 60 percent of these products are related to the Asian-Pacific time zone and show rapid growth.
  • As of December, we will extend our trading hours to cover the Asian time zone. This extension will provide our customers in the Asia-Pacific region with access to our benchmark products during the whole of the Asian trading day.

Coming back to digitization, amongst our client base, most of the proprietary trading firms in Asia are already trading digital currencies or are at least observing. Buy-side clients, in particular family offices and hedge funds, have also become active already. My personal view is that the digitization of assets has started. The ways in which we transfer value will change in the future due to blockchain technology. This will include products of all asset classes including commodities, real estate, securities and debt.

In short, we need to make sure to stay competitive, and we have the people and the power do manage that. By the way, the headline of this article is a quote by Bruce Lee and since there is a lot of wisdom in Asian proverbs, let’s conclude with another one “Those who say it cannot be done, should not interrupt those doing it”.