Axia Energy Europe, the entity formed by the merger ofKoch Energy Trading and Entergy Trading and Marketing, plans to set up a weather derivatives desk in London within the next quarter. John Polasek, head of structured products and origination for weather products in Houston, said the company is setting up a London-based desk to increase its presence in Europe. Axia has more time to look at new markets now that the merger between the Koch and Entergy trading operations is complete, he added.
Uday Narang, managing director of trading in London, will head the European weather derivatives business. Narang declined to comment.
Energy companies will make up the bulk of Axia Energy's clients but Polasek hopes to attract retail and other non-energy companies as well. Energy companies make up the bulk of the market because they have the largest and easiest to quantify exposure to weather.
Polasek thinks Axia Energy will be able to take on existing players in the European market because it can leverage Entergy's existing power and natural gas trading activities in London. He added Koch has done 25% of the weather derivatives transactions in the U.S. to date and this gives it an advantage in terms of experience and reputation.
