Hong Kong's Sun Hung Kai Financial (SHKF) is upgrading its foreign exchange business through a strategic alliance with Macquarie. Under the agreement, three Macquarie executives will move to the local brokerage to help it scale up its FX business and generally improve its operations to better compete in global markets.
SHKF is a leading player in the local FX market in Hong Kong with a daily FX turnover of roughly $100 million, but it has ambitions to capitalise on the continued growth of international FX markets, which is being driven by the growing popularity of FX as an investment product and the ease with which retail traders can now access FX venues on the internet.
"There is significant future upside potential in the regional foreign exchange markets," said Kevin Tai, chief operating officer of wealth management and brokerage at SHKF. "As emerging markets across the region continue to grow generally at above-average rates when compared with developed economies, we see numerous opportunities for the broader FX sector to benefit from rising inbound and outbound trade flows."
The alliance, agreed earlier this week, will involve Macquarie FX Investments buying a minority interest in Sun Hung Kai Forex for an undisclosed sum.
Macquarie will benefit from the deal through its access to SHKF's strong local presence. "This alliance is a logical step in our Asian financial markets growth strategy and will form an integral part of Macquarie's foreign exchange investment portfolio, which Macquarie has grown in key global markets since 2001," said Simon Wright, head of fixed income and currencies at Macquarie.
The Australian-headquartered bank has entered into similar alliances in markets such as the US and Canada.