Bulk of MF Global London fuel oil team quit, sources say

By Francis Kan

SINGAPORE (BestGrowthStock) – Futures brokerage MF Global Holdings (MF.N: ) has lost eight brokers from its nine-man London fuel oil swaps desk, two industry sources said on Thursday.

The eight brokers resigned earlier this month, and are currently serving out their “gardening leave,” an industry source told Reuters.

The remaining member of the team will be leaving soon, the sources added. A spokeswoman for the company in London declined comment on the departures.

“We can only confirm that the London fuel oil desk is still operating,” she said, when asked if MF Global would close its fuel oil desk in London.

The resignations come less than a month after the company shut its Singapore-based Asia fuel oil broking desk, following the departure of all six of its brokers, in a broking sector that has been described as saturated.

MF Global is the second company in Singapore to exit the fuel oil broking business this year, after Nittan Capital, a unit of Japanese money broker Central Tanshi, shut its oil-broking desk about three months ago.

But even as the Singapore brokerage industry is expected to undergo consolidation, others are entering the sector, with U.S.-based McQuilling expanding into energy brokerage in Asia by starting a fuel oil broking desk next month, possibly the first shipbroker to do so globally.

McQuilling has hired five of the senior brokers who left MF Global Singapore to join their six-person fuel oil desk.

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MF Global’s London and Singapore fuel oil teams worked in tandem to cover the Asian and European markets. Industry sources said both desks were profitable.

The company also has a distillates broking team in Singapore and a gas oil broking desk in London.

New York-listed MF Global Holdings said in May it would cut its workforce by up to 15 percent after the futures and options broker posted an unexpected quarterly loss of $96.5 million.

Industry sources said the company had frozen hiring since the start of the year in an effort to trim costs.

The firm in March appointed a new chairman and chief executive officer, Jon S. Corzine, a former governor of the U.S. state of New Jersey and former chairman of Goldman Sachs.

He said in May that the group’s fiscal 2010 performance was “completely unacceptable.”

In a series of moves to rein in costs, MF Global said it would reduce staff by 10 to 15 percent from a workforce of about 3,200 in the current quarter, freeze new hiring, reduce compensation, and eliminate or postpone initiatives that were not central to the company’s direction.

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(Editing by Ramthan Hussain)

Bulk of MF Global London fuel oil team quit, sources say