Compare share turnover ratios of Nasdaq US and NasdaqOMX Nordic exchanges: 1040% vs. 140% in October 2009 (see figure
here). Trading is seven times more active in the Nasdaq US. Spring 2010 will bring the same technology to Nordic exchanges where the same large international players are already present. Shall we see some heavy trading in previously sometimes illiquid markets?
I hope to see this trading increasing market valuations and creating more revenues to brokers.
Well that is only a hope. Automated trading is behind those impressive US figures. However, just a handful of Nordic stocks are liquid enough for real high frequency trading. And only large international brokers have tools, experience and knowledge for
this kind of trading.
Are Nordic players prepared for the game? At least some Nordic brokers and illiquid stocks are out of the game. Or if they are not we will see some severe market reactions in swallow trading landscape.
More importantly, are Nordic asset managers and institutional investors prepared? Well I think some if not all lack the tools, experience and knowledge.
How about post-trade processes? This spring will measure up how STP we are in a fresh Nordic CCP-world.
Spring 2010 will show us how informed local brokers and investors will meet up with non-informed, technologically advanced, high-frequency traders. Let it be a success story.