FACTBOX-Banks expand commodities trading in Asia

July 12 (BestGrowthStock) – Banks are expanding commodities trading
desks in Asia as the region’s rapid growth prospects and
regulatory changes in the United States and Europe pull
investors east.

Besides establishing footholds in emerging giants such as
China and India, banks are also focused on enlarging portfolios
to include metals, iron ore, coal and freight.

France’s Societe Generale (SOGN.PA: ) expects commodities to
be its main growth area for the next five years and plans to
take a bigger share in trade financing and hedging.

Standard Chartered (STAN.L: ) aims to start trading energy
products such as crude oil and coal on a spot basis, joining
investment banks Morgan Stanley (MS.N: ) (Read more about the money market today. ), JPMorgan (JPM.N: ) and
Barclays (BARC.L: ) and the latest entrant, Australia’s Macquarie
Group (MQG.AX: ).

Credit Suisse (CSGN.VX: ) sees big opportunities in bulk
commodities while Citigroup Inc (C.N: ), Nomura International and
Australia’s ANZ Bank are beefing up their commodities teams.

SOCIETE GENERALE (SOGN.PA: )

Global head — Edouard Neviaski

Staff — The bank covers Asia-Pacific trades out of
Singapore and recently started a sales office in Shanghai. It
plans to double its manpower in the region by the end of 2010,
said Eric Simon, the bank’s head of commodities sales for
Asia-Pacific.

History — SocGen started commodities trading in Europe in
the late 1990s, entering the Asia market early in 2000 and
trades energy products from crude oil, oil products to coal and
metals.
Focus — It also trades in precious and base metals in
over-the-counter (OTC) swaps as well as futures on the London
Metals Exchange (LME).

SocGen has set up a sales team based in Shanghai, allowing
it to do business with firms outside the 30 State-Owned
Enterprises (SOE) allowed to trade with offshore banks, Simon
said.

The team will focus on offering risk management services
for the metals market.

Growth plan — The bank expects commodities to be its main
growth area for the next five years, said Simon.
[ID:nSGE64O08K]

It plans to double its client base and develop soft
commodities such as palm oil and grains over the next two
years, he said.

It will next focus on the Indian commodities market for
non-oil products, after building a strong presence in
Singapore, China, Hong Kong and South Korea.

CREDIT SUISSE (CSGN.VX: )

Global head — Adam Knight, who joined in 2007 from Goldman
Sachs where he was head of global metals trading.

Staff — More than 130 staff globally at the end of 2008.

History — Entered the business in 2005 and formed an
alliance with physical trader Glencore a year later.

Focus — Active across a wide range of commodities
including base and precious metals, oil and refined products,
natural gas, bulk commodities such as coal, iron ore and
freight as well as investor products.

Growth plan — The bank has expanded rapidly since 2007 and
wants to continue to invest in areas of strong growth
opportunity, such as Asia.

It has hired 100 people since 2007 and plans to add another
100 in the next 18 months, Knight told Reuters last year.

Credit Suisse will expand the commodities arm by
leveraging
its strong position through its fixed income and equities
businesses in Asia, said Alexander Toone, its Asia-Pacific head
of commodities.

Toone sees big opportunities in the bulk commodities market
such as thermal coal, iron ore and freight, in addition to
energy and metals.

STANDARD CHARTERED (STAN.L: )

Global head — Arun Murthy. He was promoted to the global
head of commodities trading based in Singapore, from his
previous role as global head of trading in June 2010. Before
joining Stanchart in 2008, Murthy was the Asia commodities team
head at Lehman Brothers.

History — The bank started its commodities business four
years ago. It tripled its customer base in 2008 from the
previous year while commodities revenue almost doubled in 2009.

Focus — The bank aims to provide hedging services to
clients, mainly end users and producers. It offers
commodity-linked financing and structured products in precious
metals, base metals, energy and farm products. In the past
year, its portfolio grew to include iron ore, freight, coal,
palm oil and rubber.

Staff — 50 in Asia and the Middle East. It recently hired
the former managing director of Singapore-listed Chemoil, Karan
Chabria, as its global head of oil products trading.

Growth plan — Stanchart is looking to expand its
commodities trading business into the physical energy markets,
mainly for crude oil and coal, Murthy said. [ID:nSGE661097]

He expects hedging needs to rise in Asia as countries
eventually deregulate prices.

FACTBOX-Banks expand commodities trading in Asia