The Hong Kong exchange has unveiled a HK$3 billion project to improve its technology over the next three years, allowing it to better compete with overseas bourses.
But brokers say they expect the upgrade - under Hong Kong Exchanges & Clearing's (HKEx) programme called Orion - to make it harder for small local brokers, which lack a technological background and resources, to compete with banks and large brokers.
Orion's technology initiatives include establishing a new data centre and upgrading exchange platforms to speed up information delivery and trading, and allowing HKEx to provide new electronic services.
HKEx chief executive Charles Li Xiaojia said at the beginning of this year that he wanted to diversify the bourse's business model by tapping new income sources. This would cut down its reliance on stock trading and initial public offerings, he said.
'HKEx is investing in technology to ensure Hong Kong retains and strengthens its position as a leading financial centre,' Li said in a media briefing yesterday.
'This investment will enable us to face increasing competition from other exchanges in Asia and around the world, and will be a platform to drive our future growth.'
Li said HKEx needed to catch up with international trends, as more developed markets engage in high-frequency trading and set up so-called dark pools - platforms where bids and offers are concealed from the public. Japan and Singapore have had multimillion-dollar projects to speed up and upgrade the capacity of their exchange trading platforms.