The 31st Burgenstock Meeting has kicked off in the resort village of Interlaken, and the halls this year are full of new faces representing new exchanges – much as they were in the 1990s, when exchanges were proliferating across Europe.
That proliferation eventually gave way to deal-making and consolidation, resulting in Euronext, Eurex, and NASDAQ OMX, with a smattering of outliers.
The proliferation now is in Asia – apropos, since we'll be featuring Asia in our November edition, which I'm working on now – and comes as the once-separate emerging-markets program integrates more and more into the main body of talks.
By one count, the number of exchanges in Asia has doubled over the past two years – with the most recent new platforms launching in Indonesia, Malaysia, and Nepal, with the long-awaited Hong Kong Mercantile Exchange (HKMEx) set to go live in October.
The HKMEx will probably be the one most westerners are interested in, because it will act as a conduit between Chinese markets and the rest of the world – a role that Hong Kong Exchanges and Clearing (HKEx) has long enjoyed without competition.
The president of HKMEx is former Nymex vice chairman Albert Helmig, and the clearinghouse is LCH.Clearnet. Be sure to pick up our November issue for full details.
Another emerging theme here – and in our November issue – is the decoupling of Asian regulators from the West in general and the US in particular.
“They used to look at the US as a model, but now it's a cautionary tale,” said Lamon Rutton, the former UN official who now helps run the Multi Commodity Exchange of India. “People looking to do business in Asia may find this means less internatinalization and slower market creation than we've seen lately.”
More fascinating are the truly new markets in development – such as the Ethical Water Stock Exchange, the designer of which, Valerie Issumo, is using this year's event to line up a platform provider. She plans on creating a trading platform for water rights and water quality – a burgeoning market already worth $10 billion per year – twice the size of the cocoa market.