Emissions Trading Steps Up A Gear

Volumes in the European emissions trading market have jumped and traders have started looking at spread trades and options in anticipation of the European Union approving some of the largest national allocation plans early next month.

  • 17 Sep 2004
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Volumes in the European emissions trading market have jumped and traders have started looking at spread trades and options in anticipation of the European Union approving some of the largest national allocation plans early next month.

Thomas Roeder, head of rates at Dresdner Kleinwort Wasserstein, said, "People are now getting serious about this." James Emanuel, broker at Evolution Markets in London, said volumes have shot up to 750,000 tons what in the first half of September from half a million in July and just 25,000 tons in January. Allocation plans will divvy up how much each company will be allowed to pollute.

Most of the activity is in the forward market, but Roeder said some traders have started to looking at options and spread trades. In an example spread trade an institution would sell emission credits in the 2005 and receive them in 2007. It may do this to get access to cheap funding, noted Emanuel. A firm on the other side may be punting the price of emissions credits will fall in 2007 as many of the carbon reduction projects, such as new forests, come in line and more credits hit the market.

David Foster, emissions and weather derivatives trader at Calyon in London, said there is too much uncertainty to trade options at the moment, but he expects that when the national allocation plans are approved Calyon will execute test trades and then jump in with both feet.

  • 17 Sep 2004

All International Bonds

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1 Citi 241,977.38 927 8.19%
2 JPMorgan 223,817.40 997 7.58%
3 Bank of America Merrill Lynch 216,160.55 723 7.32%
4 Barclays 185,098.93 672 6.27%
5 Goldman Sachs 158,991.47 518 5.38%

Bookrunners of All Syndicated Loans EMEA

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1 JPMorgan 32,522.19 61 6.54%
2 BNP Paribas 32,284.10 130 6.49%
3 UniCredit 26,992.47 123 5.43%
4 SG Corporate & Investment Banking 26,569.73 97 5.34%
5 Credit Agricole CIB 23,807.36 111 4.79%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 Goldman Sachs 10,167.68 46 8.81%
2 JPMorgan 9,894.90 42 8.58%
3 Citi 8,202.25 45 7.11%
4 UBS 6,098.17 23 5.29%
5 Credit Suisse 5,236.02 28 4.54%