Dresdner Kleinwort Benson plans to launch a Japanese credit derivatives trading and structuring book and will hire four to five professionals to staff the effort. It may also hire traders and structurers in other Asian centers such as Hong Kong in the medium term, said Yukiko Omura, managing director, head of global markets-Japan in Tokyo, declining further details on this point. Currently it trades Asian credits out of its London book, but with this move, aims to ramp up its credit derivatives business in Japan.
Dresdner is doing this now that Asia's credit derivatives market has taken off and will start first in Japan because it is the biggest market in the region, Omura said. She acknowledged though that Dresdner is late to the game. "We are behind in terms of hiring these people compared to our main competitors. We are desperately trying to catch up," she conceded. The move comes on the back of a two-year push by the firm in investment banking and debt in Asia. The Japan credit derivatives book will offer a variety of products including credit default swaps and credit-linked notes and will enable Asian investors to access international names.
Dresdner will structure and trade Japan-originated business out of Tokyo, while the rest of Asia will be handled out of London, Omura explained. The Japanese market has grown too big to manage solely out of London, she continued. Dresdner already has two credit derivatives structurers in Tokyo. She declined to give a time frame as to when the Tokyo credit derivatives book would be active.
A plethora of banks set their sights on Japan last year as they launched or expanded credit derivatives teams there (DW, 5/22).
A trader at a rival bank in Tokyo said Dresdner would have its work cut out catching up with banks that have already cornered Japanese end users by being on the ground early on. Another rival noted though that the market is still fairly young and that other banks were also in the process of setting up shop, declining to name any.