ABN AMRO has closed its five-member Tokyo equity derivatives desk. The firm has let go Daisuke Kikuchi, head of corporate marketing in Tokyo, who joined last year from Westdeutsche Landesbank to run equity derivative sales in Tokyo (DW, 6/16/02), as part of the move. The decision follows Scott Christensen, head of equity derivatives trading in Japan, relocating to New York last month to assume the role of U.S. head of equity derivatives trading. "We are in the process of relocating our equity derivatives business from Japan to Hong Kong but will continue to provide derivatives products on Japanese equities," said Steven Blaney, spokesman at ABN. He declined to comment on the reason for moving the desk.
Market officials said Ben Suzuki, equity derivatives trader in Tokyo, is relocating to Hong Kong in the coming weeks, adding that onshore equity sales have ceased. ABN is reportedly pessimistic about the long-term outlook for the Japanese equity market and wanted to consolidate its trading operation. Suzuki was not in the office and could not be reached.
Traders said they have not seen ABN in the market for the last several months, adding that the firm became less active as Japanese equity prices plummeted. In addition, low volatility means the proprietary trading desk was also executing fewer trades.
The Dutch bank shut its 100-strong cash equity operation in Japan in 2001 and thereafter focused exclusively on derivative-related equity products. "Japan's an expensive place," said an equity head in Hong Kong, commenting on the reason for the move.
ABN is not alone in pulling out of the onshore Japanese equity derivatives market on the back of a weak cash market. Bank of America (DW, 3/31/02) and CIBC World Markets have closed their operations, while Merrill Lynch recently moved trading from Tokyo to Hong Kong on the back of a restructuring effort (DW, 1/19). "We've had a tough period in Japan until very recently--everyone's had to assess their business models," said an equity derivatives head at a bulge bracket house in Tokyo.
At ABN, Kikuchi reported to Anthony Wah, head of marketing for Asian equity derivatives in Hong Kong. Wah, Kikuchi and Paris Badekas, global head of equity derivatives trading at ABN in London, declined comment.
