Singapore Exchange buys 20 percent stake in forex trading platform for $25 million

SGX Logo. Reuters

Singapore Exchange Ltd, which is positioning itself as a multi-asset bourse, acquired a 20 percent stake in an upstart foreign exchange trading platform, BidFX, for $25 million, with an option to take a majority interest in the company.

"By bringing together the two pools of liquidity in listed foreign exchange derivatives and over-the-counter products, we feel that we are offering a broader proposition to financial market participants," SGX CEO Loh Boon Chye told a news conference on Wednesday.

"This also dovetails into the exchange, where we offer multi-assets for any investors looking to invest in Asia."

SGX's suite of equities, commodities and forex derivative products have helped power earnings growth, despite a subdued performance in its cash equities business.

Singapore, the top foreign exchange center in Asia and the third-largest globally, is attracting strong trading activity driven by the growth and volatility in G10 and Asian currencies.

BidFX Systems Ltd, which was spun off in 2017 as a division of TradingScreen, a provider of multi-asset execution and order management system, counts hedge funds, asset managers and regional bankers as its clients.

Officials from BidFX and TradingScreen said BidFX will use the funds to accelerate its growth, and that it plans to expand in Singapore and add new centers such as Hong Kong, Sydney and Tokyo. It is currently based in Singapore, London and New York.

BidFX clocked $8.4 million in revenue last year and is growing at a fast pace, TradingScreen CEO Pierre Schroeder said.

Exchanges worldwide are adding platforms to boost growth.

In 2018, U.S. exchange operator CME Group agreed to buy NEX Group for $5.5 billion to create a cross-border powerhouse for investors trading in the multi-trillion dollar foreign exchange and government debt markets.