Haitong International Securities Group Limited has deployed Horizon Software's trading and investment management technology for its warrants trading desk in Hong Kong. The Hong Kong-based Chinese financial services company is the first Chinese brokerage house to issue and offer market making services for warrants products in Hong Kong.
Horizon was selected by Haitong International for its whole equity derivatives trading and market making business, including ETFs and options, according to Ken Kwok, head of derivatives market making at Haitong International.
"As the first Chinese brokerage house to issue warrants products in Hong Kong it is important to make sure that we have the best possible trading technology," he said, adding that Horizon's warrant trading solution will contribute to the firm's long-term growth.
Horizon will provide Haitong International with its complete solution for equity derivatives trading via its Horizon Warrant Market Making module, which provides a comprehensive quoting engine with embedded pricing and full issue size management.
Adrien Mastronardi (pictured), North Asia sales director at Horizon said that having Haitong rolling out its trading technology across its equity derivatives trading room and being the firm's first Chinese securities client to issue and market make warrants in HK "is a very special milestone for Horizon".
"Horizon has been working on a real time monitoring tool, for all market makers, especially for the HK Warrants market," he said. "Importantly for Haitong, our platform now natively supports the real-time warrants Active Quoting obligations from Hong Kong stock exchange (HKEx)."
The Paris-headquartered firm launched a new version of its trading platform in mid-March targeted at the Asia Pacific market, which extended functionality for electronic trading and market making of all listed structured products, such as warrants, callable bull bear contracts (CBBCs - barrier products) and exchange-traded funds (ETFs).
"We have [seen] increasing demand on [our] D1 module from ETFs market makers, who have new products and more volumes, [as well as] more business strategies," said Mastronardi. "Algo scripting tools which we keep improving based on clients feedback [is also in demand]. Clients use it to automate their strategies or customise some behaviour of the hedge or market making."
The Chinese firm debuted in Hong Kong's listed market in March with two European style cash settled call warrants on the HKEx and Haitong Securities which was followed by the launch of more than 20 call and put warrants in early April in response to "strong investor demand". The pool of underlyings offered by Haitong so far includes a number of Chinese stocks such as Bank of China, Ping Ang, PetroChina and Tencent but also other international equity stocks such as HSBC Holdings, and HKEx, as well as ETFs (CSOP A50 ETF).
Haitong International has also kick-started today the second phase of its Syn~ capital markets platform implementation to create an automated, institutional middle-office solution as a key component of its expansion, particularly growth from new institutional business.
Haitong International adopted GBST Holdings Limited's GBST Syn~ platform in November 2015 in a move to facilitate the 'seamless' integration with each customer's individual requirements allowing for much smoother integration and reconciliation.
Haitong International has more than 10 branches in Hong Kong and Macau and a representative office in Beijing and Shanghai. In 2014, Haitong International bolstered its overseas expansion by establishing a Singapore subsidiary. The Chinese firm also completed the acquisition of Japaninvest Group plc in March of 2015, setting up a financial servicing network covering the world's major capital markets including Hong Kong, New York, London, and Tokyo; and appointed an equity derivatives team in London led by Ying Xiong, head of equity derivative investor solutions who joined Haitong in 2015 from Morgan Stanley where he was head of the institutional derivatives solutions group.
The appointment of this team built-up on Haitong's acquisition of Banco Espírito Santo de Investimento in 2014, and was launched to provide access to the Chinese financial markets, manufacture European products for distribution in Asia and emerging markets, and offer markets-based solutions to investment banking clients, enabling them to hedge and adjust their exposures.