Renaissance Capital's electronic trading group CEO Damian Bunce says a prospective takeover of the emerging markets-focused investment bank by Russian private investment fund Onexim will let the firm tap into capital to support its trading ambitions.
Renaissance Capital’s electronic trading group CEO Damian Bunce says the prospective takeover of the emerging markets-focused investment bank by Onexim will let the firm tap into capital to support its trading ambitions.
Onexim Group, the investment vehicle owned by Russian oligarch Mikhail Prokhorov, agreed a deal to purchase the remaining shares of Renaissance Capital it did not already own in November. The deal is still awaiting final sign off from the Russian government and regulators.
The change in ownership structure will help to bolster capital intensive trading activity that RenCap offers to institutional buy-side and proprietary trading clients, according to Bunce, who joined the firm in November 2011 from his role as head of electronic trading distribution for Europe at Barclays Capital.
Conversion trades are popular with high-frequency trading firms that arbitrage price differences between stocks listed on the Moscow Exchange – formed through the recent merger of RTS and MICEX – and the GDR equivalents listed on the London Stock Exchange’s International Order Book.
RenCap has spent heavily in low-latency trading software, such as its deal with financial software firm GATELab that offers market access in under 130 microseconds, and has developed cross-margining capabilities that allow clients to reduce the margin across correlated instruments.
These attributes, combined with the block-sized flow the broker receives from institutional clients, will help the investment bank grab more high-frequency trading clients, believes Bunce.
As well as further promoting Moscow as a financial hub, the MICEX-RTS merger will also lead to a number of market structure changes that will make it easier for international firms to access Russian liquidity.
This includes the transformation of the National Settlement Depository into a central securities depository, improving transparency and settlement finality, the move to T+n settlement, the implementation of a new cross-asset trading platform at the Moscow Exchange.