Independent futures broker Marex has unveiled its new Hong Kong office after receiving a futures broking licence from Hong Kong’s securities regulator last week.
Marex is one of the top ring dealing brokers on the London Metal Exchange (LME) and has ambitious plans to push into America and Asia, as well as into new asset classes.
The firm specialises in commodities (base and precious metals, energy and agricultural products), financial futures and foreign exchange. Its client base includes commodity producers and consumers, banks, brokers, Commodity Trading Accounts, hedge funds and professional traders.
Speaking from London, Gavin Prentice, Marex’s managing director and global head of sales, says: “What we are doing is bringing European and US markets to our Asian client base. We have had an Asian desk here in London for many years with a number of Chinese employees.
“Introducing a team in Hong Kong is going to complement that service, offering continued access to our customers in Asia but also wanting to build on that customer base. Our clients have told us that not only do they want continued access to the international markets, but they want operational coverage and front-desk coverage during Asian hours.”
All of the firm’s execution and credit facilities are managed from London, with its newly installed Hong Kong team of six effectively acting as a funnel into head office.
Marex executes trades either by voice-broked desks or Direct Market Access, and in 2010 saw its traded volumes increase 62% year-on-year to almost 165 million contracts. The company would not disclose overall notional value of the contracts.
Marex’s business is predominantly base metals, agriculture and financials, although Prentice says the firm is keen to build in areas such as energy, foreign exchange and bullion. He notes that Asia is increasingly becoming a hub for commodity derivatives, driven primarily by GDP growth of developing economies in the region.
“Having seen commodity prices across the different product lines attract a huge amount of attention recently, many reaching multi-year or even all-time highs in the case of copper, I think the timing for Marex to be opening a Hong Kong office is opportune,” he says. “We see continued price appreciation across most commodities, driven by improving fundamentals.”
Marex’s new Asia team is being led by Anise Lau, who joined from Fortis Bank Hong Kong, where she was responsible for business development in Asia. It also hired Matthew Dalziel from HSBC, where he was head of futures trading and options technology in Asia.
Two further senior hires both came from Newedge Group. Fred Lau had been a director in the financial futures and options group, while Yip Wing was an assistant vice-president in the same business.
Plus Homer Deng joined from MF Global where he was an account manager for the London Metal Exchange, and Daniel Lim has started from Fortis Bank Hong Kong where he was responsible for market-making to institutional and corporate clients on spot, futures and options.
Prentice says Marex is seeking to add two Mandarin-speaking DMA support staff, as well as more energy and agricultural brokers. “I would be surprised if by the end of this year we are not up to 18-20 staff in Hong Kong,” he states.
“We are seeing probably the best quality of CVs we have seen for years, not only as banks shed staff but also as people look away from working for them.”
Marex is a member of the London Metal Exchange, NYSE Liffe, ICE Futures, ICE US, Eurex and the CME Group. Through its US-based entity it has full clearing member status on both the CME Group and ICE US exchanges, providing execution and clearing in US markets.
Marex is majority-owned by JRJ Group, which was founded in 2009 by two former Lehman Brothers executives, Jeremy Isaacs who is now Marex chairman, and Roger Nagioff, its CEO. Its non-executive board members include Lord Fink, founder of the Man Group, and Simon Heale, former CEO of the LME.