Thursday, 9 September 2010
Credit Agricole CIB to expand commods trading
Monday, 8 February 2010 at 16:19, Reuters, London
Credit Agricole Corporate and Investment Bank plans to expand its commodity trading operations and enter the European physical gas and power markets by the end of March, its global head of commodities said.
The bank, formerly known as Calyon, will have 90 front-office commodities staff by the end of the year, Martin Fraenkel told Reuters on Monday, without specifying the current number. Calyon had about 50 globally in 2008.
"The bank has identified commodities as a growth area and it follows that if it's a growth area we need to devote resources against it, including capital," Fraenkel said.
Credit Agricole CIB, which has changed its name from Calyon, will start trading physical European gas and power as well as coal derivatives through an energy partnership with French utility EDF.
"We expect to go live with the first stage of physical trading of gas and power by the end of the first quarter of 2010," he said.
Fraenkel said that deregulation had prompted the expansion into new European energy markets.
"The whole energy market across Europe continues to deregulate and liberalise and that means that the clients of the bank have ever more need for hedging services in these markets," he said.
Credit Agricole hired five new people in January to join its commodities metals team in Europe and Asia.
Fraenkel, a former trader who has been in the commodities business for 25 years and was global head of commodities at Dresdner Kleinwort Benson, says he is bullish for the commodities complex, citing Chinese demand growth.
This is despite a sharp slide in commodities in early February which saw copper fall to three-month lows late last week. Oil has lost nearly 10 percent this year and is now near $71 a barrel.
"We like copper, we like gold and we like sugar. We think that although copper has been sold off significantly in the last few days, copper inventories are relatively low for this stage of the economic cycle," he said. (Reporting by Emma Farge; editing by Anthony Barker)
The bank, formerly known as Calyon, will have 90 front-office commodities staff by the end of the year, Martin Fraenkel told Reuters on Monday, without specifying the current number. Calyon had about 50 globally in 2008.
"The bank has identified commodities as a growth area and it follows that if it's a growth area we need to devote resources against it, including capital," Fraenkel said.
Credit Agricole CIB, which has changed its name from Calyon, will start trading physical European gas and power as well as coal derivatives through an energy partnership with French utility EDF.
"We expect to go live with the first stage of physical trading of gas and power by the end of the first quarter of 2010," he said.
Fraenkel said that deregulation had prompted the expansion into new European energy markets.
"The whole energy market across Europe continues to deregulate and liberalise and that means that the clients of the bank have ever more need for hedging services in these markets," he said.
Credit Agricole hired five new people in January to join its commodities metals team in Europe and Asia.
Fraenkel, a former trader who has been in the commodities business for 25 years and was global head of commodities at Dresdner Kleinwort Benson, says he is bullish for the commodities complex, citing Chinese demand growth.
This is despite a sharp slide in commodities in early February which saw copper fall to three-month lows late last week. Oil has lost nearly 10 percent this year and is now near $71 a barrel.
"We like copper, we like gold and we like sugar. We think that although copper has been sold off significantly in the last few days, copper inventories are relatively low for this stage of the economic cycle," he said. (Reporting by Emma Farge; editing by Anthony Barker)
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