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TK Yap has been one of the most respected traders in Singapore for the last 25 years. Now at OCBC Securities, he handles a lot of the bulge bracket broker dealer flow into the ASEAN region. I caught up with him to ask him about what trading trends he is seeing in Asia's emerging markets.

Electronic Trading in India 2011.

The recent introduction of CSI300 index futures and the availability of stock margin sell and stock loan in China have opened doors to new investment themes and strategies in the A-share markets. Research and modeling around statistical arbitrage, index arbitrage, and market making-type of strategies have started to appear, especially those focused on large cap stocks. With new requirements on the portfolio management side, many trading desks in large domestic funds that are more advanced than others in using automated trading platforms have started developing their own algorithmic trading strategies and infrastructure to accommodate such investment needs.

Having recently lain dormant, the Asian dragon is at last beginning to wake up. The world is taking notice as speed, liquidity and depth come to Asian markets, but this evolution also brings new challenges.

Over the last eighteen months real fragmentation of European equity markets has become a reality. This reflects not only the level of business being executed on new venues, but more importantly the acceptance by almost all traditional managers that fragmentation is here to stay; and therefore of their need to decide, whether alone or working with their larger brokers, how best to trade within the new paradigm. The question for many traders and investors is whether and when similar changes will be seen in Asian markets.

There have long been two versions of Asia in the minds of investors. First, there is the Asia that is all about competition, a tremendous sense of industry, a voracious work ethic coupled with cleverness and innovation. Then there is a second version of Asia which is not about competition, but instead, it’s about protection.

The sell side or “high touch” trader as they have come to be known are high energy, multi-tasking individuals. Typically at the desk before 7am to hear the latest from research and sift through overnight developments these people are synonymous with that power broker stereotype often depicted in Wall Street films. There is a close relationship with the buy side often passing trading ideas and information to their clients in the hopes of generating some trades and, of course, that full-service commission. But how has that relationship changed when the buy side has several options with which to execute a trade in our highly electronic world.