Liquidnet Dark-Pool Trading Value in Asia-Pacific Surpasses Level of 2009

Liquidnet Holdings Inc. said the value of stock traded in the first 10 months of this year on its six platforms in the Asia-Pacific region exceeded the level for all of 2009 as investors sought alternatives to major exchanges.

More than $11.3 billion in shares were bought and sold from January to October on the New York-based company’s so-called dark pools in Australia, Hong Kong, Japan, New Zealand, Singapore and South Korea, surpassing the 2009 total of $10.2 billion. That’s less than 0.2 percent of about $7.5 trillion traded on the main stock exchanges in those markets in that period, according to data compiled by Bloomberg.

“We have seen more conviction in the market from the buy side, which has helped drive our volumes in Asia-Pacific,” said Lee Porter, managing director of Liquidnet’s business in the region, said in an interview. “In particular, our U.S. clients have come off the sidelines and back into play.”

Dark pools are off-exchange trading platforms that don’t display quotes publicly with the aim of minimizing price fluctuations and lowering costs.

Frankfurt-based Deutsche Bank AG started its own dark pool in Hong Kong in August as demand for such services grew, and New York-based Citigroup Inc. said the same month that it will start a similar system in Singapore next year after trading in its Australian platform increased to a record in June.

Liquidnet began service in Japan, Hong Kong, Singapore and South Korea in November 2007 and offers its services to more than 600 firms globally. Porter, who is based in Hong Kong, said he plans to expand to other markets in Southeast Asia to further boost trading volumes.

He spoke in an interview last week in Singapore, and his press office confirmed his comments today.

The company now has 190 members in its six Asia-Pacific markets, compared with 137 in 2008, Porter said. The average size of each transaction handled by Liquidnet in the region was about $1.6 million as of the end of October, compared with $1 million in 2009.

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

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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