Singapore’s traditionally vanilla commodities market is going exotic. And demand for structurers of related derivative products is going through the roof.
“Commodities trading is dominated by US and French banks, with Japanese banks getting into play,” says Gary Lai, manager of front-office banking and finance at Robert Walters. “There is huge demand for energy resources from emerging economies such as China, Vietnam and India. This, coupled with volatile oil prices, creates demand for banks to offer innovative hedging tools.”
“A number of banks are looking to upgrade and beef up their commodities business, moving away from standard products to exotic ones,” agrees Danny Oon, a consultant handling the commodities sector at Smith & Jessen in Singapore. “They are looking for people who can move across asset classes and apply their skills: it is very different from years ago, when traders would be limited to a narrow portfolio. Banks want people who understand risk – particularly applied to commodities, which has its own behavioural patterns that are different to other sectors.”
According to Lai, banks prefer to hire locally, but due to the small talent pool, they are also hiring from Japan, Australia and Europe. In addition, structurers are moving to banks from oil companies such as BP and Shell, and specialist trading houses such as Mitsui Oil.
Candidates with five or more years’ experience can expect to earn base salaries of between US$120k (S$180k) and US$250k (S$380k), with bonuses double that in good years.