© Reuters. Goldman-backed Forex platform squeezes HSBC, Citigroup funding
(Bloomberg) – A Singapore currency platform has won financial backing from HSBC Holdings Plc (LON 🙂 and Citigroup Inc. (NYSE :). just as its trading volume more than doubled on coronavirus-driven volatility.
HSBC and Citi participate Goldman Sachs Group Inc. (NYSE :). as investors in Spark Systems after taking part in Series B funding, which has raised $ 16.5 million over two rounds, according to CEO Wong Joo Seng. Citi and HSBC representatives confirmed that their companies have invested in Spark. OSK Ventures International Bhd., A Kuala Lumpur-based investment company, also participated in the current round, which brought the company’s valuation to $ 70.5 million, Wong said.
Wong said the amount collected would be sufficient for the next three and a half years, although more investors will participate in the current round later in the year.
The timing of the collection has been favorable. Forex trading skyrocketed across the globe earlier this year as panic sales in the coronavirus-induced market meltdown triggered a storm of dollars, prompting demand for lightning-fast prices.
“Trade began to rise until the end of February, just as the infection spread,” Wong said.
Singapore, which is already Asia’s largest currency trading hub, is expecting the world’s best banks to establish electronic pricing engines in the city state to win a larger slice of the $ 6.6 trillion per day currency market. Spark is currently offering clients prices from banks such as JPMorgan Chase (NYSE 🙂 & Co. and UBS Group AG (NYSE :), which has pricing systems set up in Singapore according to Wong.
“We are executed in Singapore on a one to two millisecond time basis,” he said, noting that executions in London or New York could take on the order of 380 milliseconds, so the time savings from the regional operation are significant.
The startup, supported by the Singapore Monetary Authority, recorded an average of 5.5 billion. Dollars per day in the first quarter, up from $ 2.5 billion Dollars in the same period in 2019. But the slow global economy is now underway to dampen activity in the second quarter, Wong said, with an average trade volume slipping to $ 4.5 billion to $ 5 billion a day.
“If you have a GDP shrinkage, if you have several businesses that are hit hard, it will affect the level of economic activity and the amount of forex traded,” he said.
The vast majority of the firm’s trades currently involve Group-of-Ten assets, but Wong sees opportunities for the firm to increase its capabilities in emerging market currencies such as the Korean won, Malaysian ringgit and Indonesian rupiah.
“We see Singapore as a very natural hub for the company’s treasury and price discovery for new foreign exchange markets,” he said. “We want to be the center where it’s traded.”
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