Alternative Market Briefing

Asia dominates Latin America in OTC derivatives markets

Monday, February 06, 2012

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Anshuman Jaswal From Precy Dumlao, Opalesque Asia:

The Asian OTC derivatives market is much larger than its Latin American counterpart with Singapore leading the OTC interest rate derivatives market averaging $35bn in daily turnover in April 2010, said a new report by research and advisory firm Celent.

In its 38-page report entitled OTC Derivatives in Asia and Latin America: Evolution and Regulation, Celent said that Hong Kong is the second largest OTC derivatives markets with $18bn in daily turnover during the period followed by Korea ($11bn), and Brazil ($7bn). The study also found that Hong Kong is the leading OTC FX derivatives market, with $194bn in average daily turnover in April 2010. Singapore is second in size with $175bn, but all the other Asian and Latin American markets are quite small.

The new report also discussed the evolution of trading and regulatory infrastructure in the OTC derivatives markets in Asia and Latin America. These two regions are the main growth engines in the emerging markets, and hence it is important to understand the current scenario for OTC derivatives trading.

Anshuman Jaswal, Celent Senior Analyst and author of the report commented: "The economic growth in emerging markets in Asia and Latin America is ideally suited to the greater adoption of OTC derivatives. However, exchange-traded derivatives have been quite popular in these markets, and it is hoped that greater standardization of ......................

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