Scubidu,there is a Czech HFT outfit that a few weeks ago was accounting for 40% of the volume on LIFFE. A ratio of 0.8 on counter-party deals handled assuming they were not trading with themselves!
Indeed,high frequency trading sounds sexy but for African markets,I humbly submit that '...it's an idea whose time has not yet come'
The reason I say this is because of the high-market liquidity and high-volumes that characterize (and are necessary) for markets in which HFT works. Most high frequency shops double as market-making outfits and wholesale traders...profits come from scalping (after peeking at the order book of course) or commissions earned on volume of trade in a market etc.
Now the JSE accounts for ~85% of the trading done in Africa and the highly liquid stocks are only about 50 or 60 (don't quote me) let's assume SAB Miller. (JSE:SAB) Now compare the tick-by-tick prices and what that has moved (volume-wise) recently to say Anheuser Busch InBev (NYSE:BUD) I know the comparison is not fair but I'm sure you see my point....
Another important resource is Talent. HFT outfits are backed by Math and Physics PHD's and crack software developers who write the algorithms and develop the code. In Kenya,JKUAT is now offering a Bachelors degree in Financial Engineering and that batch,to the best of my knowledge,is likely to be the first of real home-grown quants...... in London a Physics PHD with a CFA would land a job as a JUNIOR quant analyst. Go figure.
1. Risk arises when you don't know what you're doing. 2. People diversify their portfolios to counter unsystematic risk. 3. People who diversify their portfolios don't know what they're doing.