Dark pools see trade surge amid shift back into stocks
US operator Liquidnet records 20pc increase in its Asian business to top US$5b in the first quarter as investors switch from bonds
Demand for so-called dark pool trading has increased this year, with investors shifting back into stocks from bonds, according to Lee Porter, the Asia-Pacific head of dark pool operator Liquidnet.
Porter said Liquidnet, headquartered in New York with a trading network in 42 markets worldwide, including 10 in Asia, found its volume in the Asia-Pacific had been rising this year because of increasing interest in stocks.
Liquidnet's trades in Asia exceeded US$5 billion in the first quarter, representing a 20 per cent increase from the previous quarter. Hong Kong was the largest market in Asia, Porter said.
In Europe, its total trade rose 64.7 per cent in the same period to US$22.6 billion.
Porter said that last year investors were more into fixed-income products amid the uncertainty in the stock market.
"Investors did not want to take too much risk, which explains why bonds and fixed-income products were popular. But we have seen a change this year, with investors turning their gaze back on stocks," he said.
Investors did not want to take too much risk, which explains why bonds and fixed-income products were popular. But we have seen a change this year, with investors turning their gaze back on stocks