Montreal Exchange (MX), part of TMX Group, which operates a number of exchanges in Canada, has extended its trading hours in order to attract Asia-based trading.
Luc Fortin, CEO, said TMX has lagged other G7 country exchanges in terms of globalizing its business, maintaining purely domestic businesses and hours. He says he joined MX five years ago with a mandate to change that.
In 2018, MX opened early to catch European flow, and now 6 percent to 10 percent of its average daily turnover originates from European investors. Fortin hopes to achieve a similar degree of business from Asia. This week it began trading at 7.30am for Hong Kong and Singapore.
MX is a derivatives exchange, listing Canadian interest-rate futures and index futures. Cash equities on its sibling exchange in Toronto will remain bound to Canadian hours, as are their cousins on U.S. stock exchanges.
This will also make it easier for Asian investors to access data on the Canadian market, which is heavy in both traditional mining, and oil-and-gas companies – as well as cleantech companies.
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exchange will be selling a lot of data relevant to ESG mandates, for example. “Investors will be able to compare the carbon footprint of our oil and gas companies against global competitors,” he said.
Fortin hopes an influx of Asian institutional money will lift Canada’s overall weight in MSCI world indexes. “We could reach 5 percent,” he said, beyond the current level of around 3 percent.
The bid for Asian flow is an institutional play. Fortin hopes to attract high-frequency traders, programmatic traders, and family-office money from Hong Kong, superannuation funds from Australia, and sovereign wealth money from the likes of Singapore.
“High-frequency is about 30 percent of our overall [turnover],” Fortin said. “But we cater as well to real-money investors who want to hold assets.”