Commodity Markets: Regulation Guides Growth Opportunities

by Anshuman Jaswal, PhD, September 16, 2010
Industry Trends
Global, Asia-Pacific, EMEA, Latin America, North America

Abstract

The commodity derivatives market has been in upheaval since the financial crisis. The OTC commodity derivatives market has been shrinking since June 2008, falling by 78% in terms of notional outstandings. Exchange-traded derivatives declined in 2007, but have grown 123% since then.

The importance of commodities as an alternative asset class has been highlighted by increased investment in exchange-traded derivatives over the last two years. Regulation has played an important role in the market’s direction. In this report, Commodity Markets: Regulation Guides Growth Opportunities, Celent looks at the changes that led to a visible difference in the way business is conducted in commodities markets.

“Tighter regulation of the commodity derivatives markets has led to higher investment in physical commodities, turning the spotlight on the latter market,” says Anshuman Jaswal, Celent Senior Analyst and author of the report. “Not only are the banks moving into this field, but commodities trading companies are moving in the opposite direction and increasingly setting up asset management and derivatives trading units.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

6

Market Overview

7

Physical Commodities as an Asset Class

11

Leading Broker-Dealers

14

Leading Financial Institutions Operating in Commodities

16

 

Barclays Capital

16

 

Bank of America Merrill Lynch

16

 

BNP Paribas

17

 

Credit Suisse

17

 

Deutsche Bank

18

 

Commerzbank

18

 

Goldman Sachs

19

 

JPMorgan

19

 

Macquarie Bank

20

 

Morgan Stanley

20

 

Société Générale

21

 

Standard Chartered Bank

21

 

UBS

22

Leading Trading Firms

23

 

Glencore

24

 

Trafigura

26

 

Vitol

27

 

Gunvor

29

Conclusion

30

Leveraging Celent’s Expertise

32

 

Support for Financial Institutions

32

 

Support for Vendors

32

Related Celent Research

33

Sign in to download reports and access personalized information