Liquidnet Says Asia-Pacific Dark Pool Trading Doubled During First Quarter

Liquidnet Holdings Inc. said its Asia-Pacific equity trading volumes in the first quarter more than doubled from last year as stocks rallied across the region.

Liquidnet, which operates an alternative trading platform, also known as a dark pool, said it handled $3.75 billion worth of trades for institutional investors in Australia, Japan, Singapore, South Korea and Hong Kong in the three months to the end of March. That’s 135 percent more than the transactions that went through its system in the same period a year ago and a record volume for the company in the Asia Pacific, it said.

Dark pools are off-exchange trading platforms that don’t display quotes publicly, helping investors minimize price fluctuations and save costs.

“We have seen a rebound in confidence and a reduction in volatility in the region since the start of the year and that’s supported the recovery in volumes at Liquidnet,” said Lee Porter, Hong Kong-based Managing Director of Liquidnet’s Asia- Pacific business.

Alternative trading systems have been attracting asset managers with faster transactions and smaller price ticks. Dark pools accounted for 1 percent of transactions in Asia last year and their share is expected to rise to 3 percent within three years, according to estimates by New York-based Greenwich Associates.

The MSCI Asia Pacific Index climbed 34 percent through 2009, the biggest annual advance since 2003, and extended that gain by 3.9 percent in the first three months of this year. The Asian gauge climbed to 126.8 on Jan. 15, its highest closing level since August 2008.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.

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