Broker FIS Says Relocating Ship Futures To Dubai

FIS is relocating most of its dry cargo ship futures team to Dubai from London to take advantage of growth markets there and closer proximity to Asia, the freight and commodities derivatives broker said on Tuesday.

FIS is one of the leading brokers in the freight forward agreement (FFAs) market and has expanded its swap activities to include shipping, iron ore, steel and fertilisers. FFAs allow a buyer to take a position on freight rates at a point in the future.

FIS managing director John Banaszkiewicz said 10 of its London-based FFA brokers, the majority of its FFA dry cargo operation, would move to Dubai with effect from April 2.

“It’s a zero tax environment (in Dubai), which is an advantage,” Banaszkiewicz told Reuters. “But the main reason was the region is starting to expand with a lot of imports of commodities there and we also like the proximity to Asia.”

He added FIS aimed to capitalise on the freight swap market in Asia with the growth of its iron ore, steel and scrap swaps coverage.

FIS said its physical freight and research desks and other employees including freight options and bunker fuel swaps desks would remain in London.

“It will just be primarily freight derivatives in Dubai to start with,” Banaszkiewicz said. “But it could be a test market for other markets like bunker fuel and fertilisers which they produce a lot of in the Middle East.”