Goldman Sachs Sees Fast Adoption of SIGMA X Hong Kong

SIGMA X's average daily volume increases 12-fold over the last two months as investors in Hong Kong-listed securities turn to alternative liquidity pools.

Goldman Sachs Electronic Trading (GSET) reports that investors in Hong Kong-listed securities are turning to alternative liquidity pools more rapidly than other markets, according to data following the launch of SIGMA X in that region recently.

The average daily trading value through SIGMA X Hong Kong has seen a 12-fold increase over the last two months, outpacing the initial growth of SIGMA X in other markets, including Japan, according to the company’s release.

“The fast adoption of SIGMA X in Hong Kong demonstrates the market’s sophistication and investors’ strong appetite for alternative trading systems,” stated Shuya Kekke, managing director and head of GSET Asia.

In the release, Kekke said the firm is seeing diversity not only in the types of clients participating, but also in the way they are interacting with SIGMA X. “Clients are increasingly providing liquidity directly on the SIGMA X order book and experiencing high cross rates with other participants,” stated Kekke in the release.

Participants in Goldman Sachs’ SIGMA X include a host of liquidity providers including hedge funds, institutions, and broker dealers as well as franchise flow from Goldman Sachs’ trading desks. SIGMA X is the largest non-displayed liquidity pool in the US by equity shares traded daily, according to Rosenblatt Securities, April 2009 report, having grown its average daily volume 10-fold in the last two years, and trades over 300 million shares per day with a notional value of about $5 billion USD.

SIGMA X Hong Kong, launched in March 2009, is a fully licensed ATS and allows trading for stocks listed on the Hong Kong Stock Exchange. Clients can access SIGMA X Hong Kong through Goldman Sachs’ REDIPlus EMS (execution management system), through third-party trading systems or via any system that supports FIX Protocol.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio