Partners target through train stock trading scheme with cloud service

PUBLISHED : Monday, 04 August, 2014, 3:40am
UPDATED : Monday, 04 August, 2014, 4:33am

Preparations for the launch of Shanghai-Hong Kong Stock Connect, the through train for mutual stock market access by investors in the two cities, have increased with the participation of International Business Machines Corp in a new online service for the scheme.

Infocast, a Hong Kong financial information and trading systems provider, is partnering IBM to introduce InvesTrade-as-a-Service, the first automated "cloud" platform for banks and brokerage firms to trade Shanghai A shares under the through train programme.

"We have targeted approximately 200 retail banks and securities firms which stand to benefit from a cloud-based solution to trade Shanghai A shares," Infocast president Cecily Ho told the South China Morning Post.

The Securities and Futures Commission and the China Securities Regulatory Commission jointly announced in April the pilot programme that enables investors to have a more direct and flexible way to trade Shanghai-listed shares without going through fund managers.

Under the scheme, both the stock exchanges in Hong Kong and Shanghai must implement mutual order-routing connectivity and related technical infrastructure to enable investors to trade shares listed on each other's market.

"We see an exciting market opportunity for our cloud-based platform brought on by Shanghai-Hong Kong Stock Connect," Ho said. "A number of the institutions that we're targeting are existing Infocast or IBM customers subscribing to other services."

Cloud services enable enterprises to buy, lease, sell or distribute over the internet a range of software, business systems and other digital resources on demand, like electricity from a power grid. Such resources are hosted in data centres.

InvesTrade is a subscription-based, ready-to-go trading service that requires no capital investment from banks or brokerage firms. Infocast provides the trading engine, which is hosted and distributed through IBM's recently opened SoftLayer data centre in Hong Kong.

Ho said InvesTrade enabled "automated scaling at millisecond-level performance" so that banks and brokerage firms could immediately respond to unforeseen trading volumes.

IBM paid US$2 billion in July last year to acquire SoftLayer Technologies, previously known as the world's largest privately held cloud infrastructure provider with customers such as WhatsApp and Dropbox.

"We're building 15 data centres this year, and Hong Kong was the first to go live," said Lance Crosby, the chief executive at IBM's SoftLayer business. "We have about 40,000 cloud specialists around the world, and we're offering the most secure technology for customers to use."

Market experts, however, still expect some issues to crop up when the stock trading scheme takes off.

Louis Tse Ming-kwong, a director of VC Brokerage, said: "It is important that fast trading under this through train runs smoothly with strong technical support, like what the Infocast and IBM service is offering. But I don't know how many people in Hong Kong are actually interested in A shares."