Goldman dominates world's energy trading
Goldman Sachs has emerged as the largest energy trading firm in the world, controlling 40% of the market, according to a global survey of participants in the sector.
Goldman Sachs is followed by Morgan Stanley, which has a 35% market share, and third-placed Barclays Capital, which was used by 27% of the companies surveyed by US financial research firm Greenwich Associates.
In Europe, Goldman Sachs and Barclays Capital are tied for first place in energy trading. But overall, Greenwich Associates' research found that Goldman, along with Morgan Stanley and JP Morgan, were judged by participants in the survey to have the best global businesses.
Giovanni Carriere, a consultant at Greenwich Associates, said: "Goldman Sachs and Morgan Stanley's superior product platform, service levels, and unwavering commitment to the commodities business over the years has put them at the top."
However, Greenwich said that smaller players are using corporate lending relationships to build their energy trading businesses to break into the market and compete with the larger investment banks.
Greenwich Associates' research, which is based on interviews with 287 companies in the US, Europe and Asia, found that 48% of participants hedge their sales of energy or their purchases of it, with firms the most active in Europe, where 63% put hedges in place.
The market is set to expand, with 22% of companies saying they expect to increase hedging in the coming months, against 12% who expect to cut it.
Source: Financial News
Date: 05.04.2007 [ID: 2]