Commodity market competition enters bold new era

[Joanne98]

Goldman Sachs and Morgan Stanley have dominated the commodities business for almost two decades, but for the first time their de-facto duopoly is under threat.

The credit crunch has forced the two Wall Street banks, which dominate all areas of commodities, from taking clients’ risk and hedging positions to proprietary trading, to adopt a more cautious approach.

That is creating an opportunity for other players. Barclays Capital and JP Morgan are the best placed, bankers say, But even smaller operations such as RBS Sempra, Deutsche Bank, Credit Suisse and Société Générale are set to benefit. Merrill Lynch’s path is unclear after its recent merger with Bank of America.

Whether others will be able to fully replicate the success of Goldman and Morgan remains to be seen.

Continued>>>
http://www.bloomberg.com/index.html?Intro=intro3

This means we will pay more for commodities next year.

[DJ13]

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