Daiwa Securities is considering launching a credit derivatives desk in London. It is likely to start by building up a credit-default swap portfolio to balance its bond books. But once this is established, the group may look at running a structured credit products business. The Japanese firm already trades credit derivatives in Tokyo. Hayato Kino, head of credit derivatives in Tokyo, declined comment.
Daiwa has hired Stuart Duggan, previously a credit derivatives trader in South Africa, to build up the business. Duggan, who joined the firm in February, declined comment on his current and previous roles.
One market official said Japanese firms were looking to trade credit derivatives outside of Japan, because margins in Japan are shrinking. Nomura has also recently moved to expand its credit derivatives operation in London (DW, 7/11). Standard & Poor's rates Daiwa BBB and Moody's Investors Service puts it at Baa3.
