Goldman Sachs Electronic Trading (GSET), operator of a major non-displayed liquidity pool in the US, has expanded its global crossing capabilities with the launch of Sigma X in Hong Kong.
While already popular in the US, block trades done off-stock exchanges are just starting to become popular in Asia. The global financial crisis, which continues to bring uncertainty and volatility to stock markets in Asia, is expected to serve as an impetus for the growth of dark pools in the region. While many investors remain focused on long-term goals, there's no denying that many are equally looking for short-term trading opportunities that providers of off-exchange block trade systems believe are better served when done as discreetly as possible.
"The growth potential of Hong Kong's market remains significant and we think alternative pools of liquidity will play an important role in its development," says Gene Reilly, managing director and head of trading and execution for Goldman Sachs in Asia.
Goldman Sachs' Sigma X is comprised of a host of liquidity participants, including hedge funds, institutions, and broker dealers, as well as franchise flow from Goldman Sachs' trading desks. Goldman Sachs says Sigma X is the largest non-displayed liquidity pool in the US by equity shares traded daily, having grown its average daily volume 10-fold in the last two years, and trades over 300 million shares per day.
Clients can access Sigma X Hong Kong through Goldman Sachs' REDIPlus EMS (Execution Management System), through third-party trading systems or via any system that supports Fix Protocol.
"Customers benefit from the potential price improvement gained by executing orders at prices inside the primary exchanges' best bid/offer," says Shuya Kekke, managing director and head of Asian GSET. "Sigma X is completely anonymous, serving investor requirements that indications of interest are not published internally or externally."