The South Korean brokerage arm of Standard Chartered will focus on fixed-income and derivatives broking in its first years of business, betting that globalising bond markets will raise demand for Asian debt.
David Jung, chief executive of Standard Chartered Securities Korea, told Reuters on August 28 that volatile foreign currency markets would also make fixed-income products a more attractive tool to hedge in the deregulating domestic financial industry.
"Standard Chartered Securities will surely go a different way from others, which are trying to make money from equities business," the 48-year-old CEO said in an interview. "Standard Chartered Group has a strong edge in fixed-income and structured products and that will be our differentiating factor."
The securities house had no plans to provide equities brokerage services for the time being amid sluggish financial markets, he said, which were likely to shrink deal sizes and weigh on new players.
Jung saw no quick turnaround for ailing stock markets due to uncertainties about when subprime woes would come to an end and the extent of their economic impact.
A stronger dollar was likely to further cut appetite for Asian equities, he added. The securities unit, wholly-owned by the UK-based bank, won a final local business license last month, joining 60-odd securities houses operating in the country. The new company, capitalised at 300 billion won ($277 million), is the first securities unit for the parent company to provide a full range of brokerage services from underwriting to advisory.
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