UBS Warburg is in the process of setting up an emerging markets group to cover fixed-income derivatives for Latin America and Eastern Europe. Coverage will include local currency products, such as interest-rate swaps and structured products, according to an official at the firm. The official continued that while the bank has targeted the markets out of the U.S. and London it does not have a dedicated emerging markets group for derivatives products. It currently has a team of 10 debt capital markets professionals, which covers Latin America, primarily focusing on debt origination but also distribute fixed-income derivatives products and a team of four who cover Eastern Europe.
The official continued that Joonkee Hong, managing director and Asian head of debt capital markets and North Asia head of fixed-income in Hong Kong, will spearhead the initiative from New York, when he moves over there in May. Hong declined comment on the operation.
Phil Tsao, an interest-rate derivatives marketer for Greater China at Goldman Sachs, is joining UBS as Hong's successor, according to an official. At Goldman, Tsao reported to Tracey McCabe, managing director and head of fixed-income in Hong Kong, according to an official at the firm. McCabe did not return calls. Edward Naylor, spokesman at Goldman in Hong Kong, declined comment.
"We'll initially focus on Latin America and establish our presence there," said the official, noting that UBS will likely first target Mexico, Chile and Brazil. The firm will set up marketing teams and then establish local currency and fixed income trading desks "One-year's the target," the official added. UBS will also set up offices in Eastern Europe, notably the Czech Republic, Poland and Russia.
The firm will look to replicate its successful formula in the Asian regional markets, such as Korea and Singapore, where UBS has large local currency fixed-income desks, which it set up in 1999, after the merger with the Swiss Bank Corp. Hong is responsible for setting these desks up, which is why he is being charged with expanding the firm's emerging markets capabilities.
