drivers of growth at sfe fia asia derivatives conference august 2005, beijing sydney futures...
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Drivers of Growth at SFEFIA Asia Derivatives ConferenceAugust 2005, Beijing
Sydney Futures ExchangePeter HiomExecutive General Manager, Business Development
Brief Overview of SFE
• Exchange– 54m contracts in 2004– Largest interest rate derivatives market in Asia Pacific– Publicly listed
• Products– Interest rate (short, medium and long term)– Equity (index, sectors, individual shares)– Commodities– Currency
• Platform– Electronic– Global Distribution– 24 hour
SFE Annual Volumes
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
Total Annual Exchange Volume
Drivers of SFE Growth
• Overall Drivers– Cyclical– Secular– Organic
• New Product Development– 30 Day Interbank Futures Contract
• Access and Distribution– Extremely easy to obtain access without regulatory obligations– Remote participation however is not so easy
Overall Drivers
OrganicGrowth
SecularTrends
CyclicalFactors
GDP GrowthBalance Sheet GrowthNew Products Customer Acquisition
Basel 2, IAS 39/FAS 133Growth of CTAs/ hedge funds
Compulsory superannuation
Spread differentialsMarket volatilityCurrent account deficitOffshore issuance into AustraliaAbsence of growth in CGS
30 Day Interbank Futures Contract
30 Day Interbank Cash Rate Futures Average Daily Volume by Month* and Month End Open Interest
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Aug
-03
Sep
-03
Oct
-03
Nov
-03
Dec
-03
Jan-
04
Feb
-04
Mar
-04
Apr
-04
May
-04
Jun-
04
Jul-0
4
Aug
-04
Sep
-04
Oct
-04
Nov
-04
Dec
-04
Jan-
05
Feb
-05
Mar
-05
Apr
-05
May
-05
Jun-
05
Jul-0
5
Mo
nth
En
d O
pen
Inte
rest
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Ave
rag
e D
aily
Vo
lum
e
Average Daily Volume Month End Open Interest* includes Non-Traded Volume
30 Day Interbank Futures Contract
• Complimentary to well developed Overnight Index Swap (OIS) over the counter market
• Available for trade monthly, out to 12 contract months• Similar to the CBOT Fed Fund futures contract• Launched two years ago and now a benchmark product in
Australia• Supported by an official market maker who was also a major
participant in OIS market• Average daily volume approximately 6,000 contracts, daily
record 20,000 contracts• Diverse user base, globally distributed.
International Customer Acquisition
Access and Distribution
• International Communications Network– Europe: London– United States: Chicago/New York– Asia: Hong Kong– Australia and New Zealand
• Software Vendor Compatibility– All 13 major vendors now coded to SFE– Plus SFE proprietary trading terminal (SYCOM)
• Streamlined Access Model– Working with SFE Participant brokers– Eliminating paperwork where possible
International Customer Acquisition
Sales and Marketing
• Regional Sales Management– United States Office (Chicago)– Europe and Asia managed remotely
• Customer Segmentation Central to Sales Effort– Database development and analysis– Targeting and tracking– Individual and Team KPI’s
• Marketing Support– Typical marketing team, plus– University PHD Team led by Fulbright Scholar
International Customer Acquisition
Results YTD
• SFE Exchange growth YTD = 15%• SFE International Growth = 41.5%
United States = 38.9%
Europe = 53.9%
Asia = 340%
• Direct Customer Acquisition = 38• Indirect Customer Acquisition = unknown
Thank You
Sydney Futures ExchangePeter HiomExecutive General Manager, Business Development