UBS to launch Hong Kong dark pool

UBS to launch Hong Kong dark pool

Swiss bank UBS is launching its Price Improvement Network (Pin) dark pool trading venue in Hong Kong.

The bank already operates the dark pool in the US, Europe, Japan and Australia. It is now following the lead of Goldman Sachs, which launched its Sigma-X platform in Hong Kong in March. CLSA, Instinet and Investment Technology Group also run platforms there.

Although not as prevalent as in the US or Europe, dark pools are becoming increasingly popular in Asia. With trading volumes falling across the region, alternative pools are seen as an attractive, and cheaper, way of dealing in large blocks of shares without moving the market too much.

Yet recent research from Tabb Group suggests just 0.3% of value traded in Hong Kong, Korea, Australia, Singapore and Taiwan was traded off-exchange in 2008, with this set to rise to 1.5% in 2010.

This month UBS agreed a deal with Goldman Sachs and Morgan Stanley that will allow their clients to access each bank's European dark pools. The agreement, which follows a similar deal between the three in the US last year, covers Pin, Goldman's Sigma and the Morgan Stanley MS Pool.

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