With Korea experiencing thriving equity markets, and with regulatory changes making the use of derivatives easier, UBS Warburg has hired two senior bankers from Merrill Lynch, one of whom will be a managing director.
The move signals UBSW's belief in the potential for a booming equity derivatives market. In the second half of this years, new regulatory changes will allow OTC derivatives transactions between domestic houses, while on January 28th a single stock option market was launched.
Already, Korea has the largest exchange-traded derivatives market in non-Japan Asia, and has futures market turnover of around $5 billion per day, which is on a par with the cash market.
In a move to reinforce its position in this business and export expertise to other Asian markets, UBSW has hired Min Park and Chang Sik Cin from Merrill Lynch. Park will be the head of structuring for risk management products and will be an MD, while Cin will join as a senior marketer in the same division.
They will target high net worth individuals, and corporates with their offerings as well as foreign investors that want to gain leveraged exposure to the Korean equity market, create short exposures or invest in stocks that have foreign ownership limits such as Posco, Korea Telecom and SK Telecom.
"UBS Warburg is already extremely active in local and regional stock markets and expects to continue to be an active issuer of innovative risk management solutions," says Brad Orgill, head of Asia Pacific equities. "We plan to launch products to suit the risk profile and investment objectives of a broad range of investors in Asia."