Singapore on My Mind

Having recently finished my feature on the Singapore Exchange's soon-to-launch high-end matching engine, SGX Reach, I'm in a Singapore state of mind. I’ve never been there, but I hear it's lovely.

The general consensus from the dozen trading firms, vendors and analysts I’ve spoken to is that this is a long-term play for the SGX. While there will be a media push to look for immediate growth, this is simply a starting point. For Singapore, and Asia in general, it is a major step toward becoming something more than an emerging market.

Now the imperative falls to the trading firms, says Peter Tierney, senior vice president of NYSE Technologies. As a result of this upgrade, trading firms will have to examine their current infrastructure requirements to match the faster trading engine, especially if they are latency-sensitive, he says.

He adds that he expects firms in the region to take a "gradual approach to reviewing their technological requirements, as a faster trading engine is only one part of the entire chain."

Singapore is ripe for growth among the hedge fund community. A recent Capgemini and Merrill Lynch report on global wealth found that Singapore has about as many millionaires as the whole of Europe; thus, it's an untapped, enticing market for those looking for new investment. Furthermore, the Monetary Authority of Singapore eased restrictions for hedge fund startups in the region.

New hedge funds mean new opportunities for vendors to grow their footprints. Even the major hedge funds and asset managers in the region would be wise to upgrade their infrastructure in preparation for increased competition.

A little more than a week from now, on August 15, we will get the first public look at SGX Reach as it goes live. This will definitely be one of the more interesting developments that we will be keeping an eye on over the next year.

I'm hoping for a successful launch ... because then maybe I can talk my boss into flying me out there to cover the market in person.