Australian Exchange Plans Hong Kong Link to Tap Into China Growth

ASX Ltd. will connect its network to Hong Kong, offering derivatives traders in the Chinese city faster and cheaper access to Australia’s main stock exchange.

“Of course, greater China is an opportunity for growth,” ASX Chief Executive Officer Elmer Funke Kupper said on Thursday. “If we put greater resources into distribution,” it can grow volumes quite significantly.

The bourse will link its ASX Net Global, which offers the fastest international access to Australia’s markets, to the Chinese city within the next 12 months. ASX’s network is already connected to Singapore, London and Chicago, allowing traders to hook up to Australia’s derivatives markets cheaply and speedily, Funke Kupper said.

ASX last year opened a direct link to CME Group Inc. in Chicago, allowing U.S.-based high-speed traders to buy and sell Australian equity futures two thousandths of a second faster. The exchange said expenses will rise by about 5 percent this fiscal year as it expands its connectivity.

Average daily turnover of stocks traded on the ASX climbed 16 percent to A$3.8 billion ($2.8 billion) and the daily average for derivatives increased 7 percent to 494,000 contracts in the year ended June 30.

ASX doesn’t intend to expand into Singapore’s “very crowded” clearing market, Funke Kupper said. Deutsche Boerse AG and Intercontinental Exchange Inc. plan to start clearing operations in Singapore.

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