Shenzhen Exchange Still Isn't Embracing Speed Amid an Overhaul

  • No real-time prices with updates once every three seconds
  • Bourse poised to link to Hong Kong, widening overseas access

Even though China’s Shenzhen Stock Exchange is overhauling its technology for the fifth time in 15 years, it’s still not embracing what modern traders want: real-time prices.

After the upgrade, orders will execute faster at the exchange. But Shenzhen will still feel sluggish to international traders accustomed to the blistering pace of 21st century markets. That’s because prices will still update no faster than once every three seconds.

More people are poised to notice the delay, which causes headaches for professional traders. The Shenzhen exchange is set to link its market to the Hong Kong stock exchange, letting more overseas traders do business in mainland China.

“Real-time market data is absolutely key,” said Ben Valentine, the head of pan-Asia electronic execution at Citigroup Inc. in Hong Kong. “We would hope that the three seconds delay goes away at some point soon.”

Three seconds is probably fine for retail investors, who make up more than 80 percent of trading volume in China. But most major markets stream share prices continuously to meet the needs of professional investors, who are increasingly using fast-acting computer algorithms to buy and sell.

Shenzhen’s exchange can now process 100,000 trades per second, said spokeswoman Huiqing Li, who declined to reveal what the pace will be following the upgrade. For comparison, Nasdaq OMX Group Inc.’s technology, one of the most used by exchanges in Asia Pacific, can handle 1.2 million transactions per second.

“The current trading system has been performing well even under the circumstances of record daily volume turnover,” Li said.

Try telling that to Joel Hurewitz.

“Processing data from Shenzhen isn’t ideal because of the data snapshots,” said Hurewitz, the global head of broker-dealer strategy at Nomura Holdings Inc.’s Instinet Pacific unit in Hong Kong. “I don’t see it getting resolved any time soon.”

Bloomberg LP, the parent of Bloomberg News, competes in the distribution of data from the Shenzhen exchange through its enterprise solutions business.

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