Recovery Drives Commodities ‘Hiring Boom,’
By Bernard Lo and Kim Kyoungwha
Sept. 14 (Bloomberg) -- Global banks are engaged in a hiring boom for commodity traders as they add staff to benefit from surging metals and energy prices, offering $1 million packages for top employees, recruiters Robert Walters Plc said.
There’s “huge demand for physical traders,” Gary Lai, manager of financial services at Robert Walters in Singapore, said today in an interview. “For top traders, especially investment bank traders, $1 million is not unexpected, it’s easy to get,” Lai said, referring to salaries and bonuses combined.
Banks including Bank of America Merrill Lynch are competing for commodity staff in Asia to increase trading revenues and attract clients’ funds. Citigroup Inc. wanted “new blood” for its Asian team and was seeking to expand at a double-digit pace, Ananth Doraswamy, regional head of commodities, said on Aug 28.
“The reason why people are hiring again is because of anticipation that demand will come back as the world economy is starting to recover,” Lai, 33, said in interviews with Bloomberg Television and a reporter. “I can show you that top traders can easily get Ferraris.”
Robert Walters has handled about 100 commodity-related hires in Singapore and Hong Kong this year, said Lai, who joined the firm in 2004. “There’s a commodity hiring boom from a lot of banks as well as pure commodity firms,” he said. That compares with about 200 cases in all of 2007 before the 2008 slump in commodity prices, he said.
Commodity Rally
Commodities as measured by the Standard & Poor’s GSCI Index have jumped 29 percent this year, exceeding the 22 percent gain in the MSCI World Index of stocks. Crude oil futures in New York have advanced 53 percent, while gold has surged to within about 2 percent of its record of $1,032.70 an ounce.
Bank of America Merrill Lynch hired five executives including Peter Beaumont, formerly from UBS AG, for Asia-Pacific commodities, according to a Sept. 1 statement. JPMorgan Chase & Co. hired seven bankers and traders to boost its commodity business, according to an internal memo confirmed by JPMorgan spokeswoman Marie Cheung. Societe Generale SA plans to expand its commodities team about 35 percent by the end of next year.
“A lot of people are going to like commodities rather than equities and other financials,” said Lai. Investments in commodity products advanced to $2.63 billion last month, at least double the amount recorded for any August, according to a Sept. 10 report from Barclays Capital.
‘Big Impact’
Asia’s influence on commodity markets “is a long-term trend that will likely continue,” Oral Dawe, chief executive officer of the Asia-Pacific commodities group at JPMorgan Chase, said on Sept. 7. China “has a big impact on actual demand for commodities,” Dawe said in an interview.
China, the world’s biggest metals user, will expand 8.5 percent in 2010, after growth of 7.5 percent this year, helping pull the world out of the worst recession in six decades, according to forecasts from the International Monetary Fund.
Goldman Sachs Group Inc. raised forecasts for most industrial metals as the recovery in the world economy cuts spare capacity, according to a report e-mailed Sept. 8. Copper, the bank’s top pick, will climb to $7,650 a metric ton by the end of 2010, the report said. The metal traded today at $6,199.
George Stein, managing director at New York-based recruitment firm Commodity Talent LLC, said last month that the most senior commodity hires may be offered guaranteed bonuses of $1 million or more. Banks were making “emergency hires” after cutting back during the recession, according to Jason Kennedy, chief executive officer of London-based Kennedy Associates.
To contact the reporters on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net; Bernard Lo in Hong Kong at Blo2@bloomberg.net
Last Updated: September 13, 2009 22:00 EDT |
