KGI Securities, one of Taiwan's largest derivatives houses with assets totaling over TWD38.38 billion (USD1.14 billion), is setting up an over-the-counter equity derivatives business and has hired senior bankers from Morgan Stanley and Merrill Lynch to spearhead the effort. Jerry Wu, executive director and equity derivatives marketer at Morgan Stanley in Hong Kong, will start later this month as regional head of equity derivatives, and Howard Tong, former director of global equity markets at Merrill in Hong Kong (DW, 3/11/02), is taking the head of equity derivatives marketing role. "The management wants to reposition itself as a regional player and equity derivatives is a part of that," said Tong. He explained that the firm first focused on building up a fixed income operation in Taipei is now shifting toward the equity side.
Wu said KGI plans to offer a range of equity derivatives including over-the-counter options, structured products and warrants. KGI, however, is not looking to gain market share from the bulge bracket international houses. "We're not going head-to-head with the big boys--we'll find our own niche," said Wu. This niche is likely to start with the firm's retail base. Structured products will include equity-linked notes and capital guaranteed instruments.
