Reflecting on market demand: what CMC's expansion in Asia-Pacific means for the region

Following his relocation from the CMC Markets Sydney office to Singapore, financial services stalwart Peter Foster discusses the company’s multi-asset offering for its institutional clients, along with his vision for the future of the South-east Asian equity market

In early 2021, CMC Markets relaunched its institutional offering under the CMC Markets Connect brand. Over the past two years, significant steps have been taken with the company rolling out new products, expanding the dedicated Connect team worldwide and convincing even more institutional clients of the unique benefits CMC can offer as a liquidity solutions provider. 

Although, to many, the CMC Markets name is synonymous with a retail background, over the past three decades the volume of work conducted with banks, wealth managers and brokers has been growing steadily. More customers are becoming aware of the market leading technology, high levels of client support and the advantage that can be delivered by augmenting traditional tier one liquidity with a sizeable book of retail business. 

2022 saw the company launch its Spot FX offering, enabling any institutional counterparty to access a comprehensive range of products from a single account. In its latest stage of growth, Connect has focused on harnessing CMC’s existing technology and knowledge around physical equities – a product that has cemented the company’s position in Australia and New Zealand, and one that it now intends to deploy across the wider Asia-Pacific (Apac) region. 

This has included the relocation of financial services veteran Peter Foster from CMC’s Sydney office to Singapore. Peter brings with him many years of first-hand equity market experience, with the intention of helping to drive the company’s multi-asset offering to an even greater number of institutional clients across the region.
 

We hear a lot about this demand for multi-asset access. What does that mean for the Apac region in 2023?

Peter Foster: I think it’s important to start by looking at who our institutional clients are and trying to understand more about how they want to develop their businesses in the years ahead. The reality is that trading relationships can be far more efficient if you only have an individual counterparty. That means a single system integration, one due diligence process, one counterparty relationship and then the additional benefits that come with functions such as cross-margining and volume discounts. It therefore follows that, if a counterparty can offer this on a multi-asset basis – so not just the core commodities, indexes and currencies, but also encapsulate a wider range of products such as exchange-traded funds, treasuries and physical equities – they will be seen as a better fit for current market demands.

Looking at the regional level, what we have seen is that the institutional market in South-east Asia is growing rapidly, the Covid-19 pandemic has led to a degree of upheaval, and businesses are eager to ensure they’re maximising efficiency at every stage of the journey. That means we have more institutions approaching us with ever more sophisticated requests and, for many, multi-asset sits at the very heart of this. It’s a situation that is being repeated globally, but the pace of change in Asia seems particularly dramatic.
 

‘Institutional’ has many interpretations in the FX and contract for differences world. Can you explain a bit more about what this means to CMC Connect?

Peter Foster: Many people will think of the very largest banks when talking about institutional counterparties, but we would say the term is far more inclusive than that, sweeping up buy-side brokers, money managers, boutique asset managers, family offices and many in the fintech community. Therefore, any corporate entity wanting a liquidity solution or execution venue – indeed anything other than a retail customer – can work with us via the CMC Markets Connect institutional channel. 

We certainly don’t work on a one-size-fits-all approach, but much of what has driven the growth of CMC in recent years has been about continuous innovation and addressing the gaps in the underlying market as we identify them. That means the definition of what we think as being institutional business is growing all the time, too.
 

What about the future? Will technology continue to drive innovation here?

Peter Foster: Very much so. Technology has always been at the heart of the CMC Markets proposition and the business has an absolute understanding of the importance of leveraging this correctly. Whether that comes from taking away some of the heavy lifting in terms of automated reporting, or something far more nuanced such as giving clients easy access to strategy formation tools with the ability to implement this information across multi-asset investments, we will continue to develop and invest into our technology to support market demand.
 

And in terms of physical equities in the region? What does this hold? 

Peter Foster: South-east Asia, simply by the nature of its geography, has a fragmented equity offering compared with Europe, the US or Australia. Across the region you have a plethora of smaller exchanges, each working in a local currency, yet institutions don’t want to be maintaining multiple trading relationships here. It all points back to the benefits of a brokerage being able to deliver that one-stop-shop solution. Whether that’s with regard to accessing commodities, currencies and government debt from a single platform, or being able to trade equities from multiple regional markets all via a single account, it’s our intention to continue expanding the tradable universe to appeal to the widest possible institutional audience.

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