Virtu to expand into China

Virtu Financial, the high-speed proprietary trader that went public in April, plans to expand into China.

Douglas Cifu, the chief executive, said on Wednesday in a conference call with analysts that Temasek, the government of Singapore's investment fund, is a long-term investor and has made "the appropriate introductions," in China where Virtu will be partnering with "the best local partner in the region to enter the marketplace."

"We haven't done anything yet in terms of trading," Mr Cifu said. "We certainly have begun very significant preliminary discussions, negotiations, and structuring of a way for us to get into that marketplace."

He added that Virtu's model means that the company does not need to set up a physical office and hire a significant number of employees. The company is also focusing on India for new opportunities.

"The business scales exceptionally well in new marketplaces, asset classes, and geographies without a significant incremental spend," he said.

China could be a growth opportunity for Virtu as other markets, such as the US and Europe, are already established and, furthermore, have drawn scrutiny from regulators.

Optiver, one of the world's largest electronic market makers, has targeted potential growth from Chinese markets amid concerns about a potential clampdown of high-frequency trading in Europe. It has been operating in Asia via Australia for 15 years but opened an office in Shanghai a few years ago.

As a market maker Virtu makes money on the spread between buy and sell orders and executes more than 5.3m trades daily on global markets, from equities to commodities and currencies

Virtu raised more than $300m in an initial public offering last month after having delayed its listing last year. The New York group had shelved its IPO when the publication of the controversial book Flash Boys by Michael Lewis focused attention on the complex US equity market, claiming it was "rigged" to the benefit of high-speed traders.

Virtu's shares were trading at $22 on Wednesday versus an IPO price of $19.

In the three months ending March 31, Virtu's revenues rose 28 per cent to $221.5m while net income increased nearly 50 per cent to $72.8m. Mr Cifu said the company benefited from a rise in volumes and volatility in the quarter with performance particularly strong in commodities and currencies.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation