UBS launches OTC agricultural derivatives

UBS has created a new agriculturals team and hired two traders and two marketers for its first foray into over the counter (OTC) agricultural derivatives.

The team, based in London and Singapore, will start operating in the second half of this year. It will initially trade sugar (raw and refined), wheat, corn, rapeseed oil, cotton and soybean (oil and meal), before branching into other commodities in 2008.

Simon Games-Thomas joins as head of the agriculturals team from the Commonwealth Bank of Australia (CBA) in Sydney, where he consulted on agricultural derivatives. He will be based in Singapore and will report to James Paget, head of commodities marketing for Europe and Asia. John Reeve also joins from CBA to market agricultural products in Singapore, and will report to Games-Thomas.

John Watson will set up the agricultural derivatives trading desk in London. He too joins from CBA, where he was a senior commodities trader. He will report to Jeff Waldron, the global head of commodity derivatives trading. Jonathan Deane joins as a trader on the desk, also from CBA, and will report to Watson.

UBS won the metals category of Risk’s Energy and Commodity Rankings 2007 (see: Going for Gold). It had been trading exchange-traded agricultural derivatives products for many years, and in 2005 began expanding its commodities coverage following client demand. The launch of OTC agricultural products is another step in the development of this business.