CAPIX Jumps in for Share of Boom
DAN TEBBUTT, The Australian newspaper
Online trading
Rapid growth in online share trading has prompted Victorian company Capix to change focus and fight for a piece of the action, according to founder Peter Cooney.
The financial software developer has launched an aggressive customer drive with new products and technology acquisitions as it gears up to tackle local competitors head-on.
The eight-year old treasury applications specialist is planning to expand into emerging energy and carbon emissions trading markets in preparation for a projected public float in the middle of the year.
Formerly known as Practical Treasury Systems, Melbourne-based Capix recently concluded a wide-ranging sales and marketing alliance with Deloitte Touché Tohmatsu.
The global accounting consultancy plans to sell and support Capix software in overseas markets after completing implementations fir Australian clients including Email and Wodonga-based Uncle Ben's.
"The relationship with Deloitte is very strategic for us," Mr. Cooney
said.
"As a small vendor, selling into large corporate's is very much name-driven,
so it had to be one of the big five."
Capix has traditionally focused on back office accounting and administration systems for brokers, corporate finance departments and smaller financial institutions.
The company is well positioned to enter new markets and take advantage of the growth in online share trading, Mr. Cooney said.
Equity and futures broking houses could use the company's Hubb Internet Exchange (HIX) product to build a Web front end for their trading platforms, he said.
Brokerages would face increasing pressure to automate trading as transaction costs tumble from traditional rates around $100 towards about $30.
"The more they can do electronically, the more brokers can drive down
cost and increase their margin," Mr. Cooney said.
The software developer predicted the Australian Stock Exchange would also face new pressure to reduce its transaction fees and support off-market trading.
Up to a quarter of NASDAQ dealings were now settled directly between
brokers through off-market electronic communication networks (ECN's),
and local traders were anxious to follow suit in an effort to reduce
costs, he said.
"There is a lot of price pressure on brokers," Mr. Cooney said.
Several broking houses have already deployed HIX and CAPIX's Order Routing and Management System (ORMS) middleware, and one large stockbroker was tipped to cut across from a rival system early next year.
Mr. Cooney predicted Capix could capture the business of up to a third of Australia's 90-odd trading houses within two years.
He said Asia was the company's most promising export opportunity, with
six existing clients in Japan, Taiwan and Thailand providing a solid
foundation.
New trading markets in electricity, and Kyoto carbon emissions, also
offer enormous growth potential for software developers, he said.
"These emerging markets will never be as prominent as the ASX, but they will be big."
The Australian January 11, 2000