Samsung Futures eyes European and US business

Aug 19, 2010

South Korea’s biggest futures firm plans to boost its global marketing team threefold to attract foreign players to its domestic derivatives market.

Having achieved a strong regional presence in Asia, Samsung Futures is concerned that it has not achieved the same level of success in Europe and the US.

The largest South Korean futures company has made persistent efforts to develop its business outside Korea. Initially, it focused on gaining a foothold in Hong Kong and Singapore, and then expanded its business territories into Australia, Japan and Taiwan.

But Samsung Futures is aware of the huge potential for attracting business from Western markets.

“We will focus our efforts on [Europe and the US] going forward,” says Jeon Ki-Suk, senior vice president of marketing. “Recognising this opportunity, we will soon increase our global marketing team’s capacity threefold.”

He notes that the Korean market for global derivatives products will grow and also forecasts increasing demand for Kospi futures and options from foreign traders. For example, Kospi200 futures are now traded on the Chicago Mercantile Exchange and Kospi200 options will be available on Eurex, the European derivatives exchange, from August 30.

Indeed, Eurex itself says volumes generated by Asian users of its contracts are rising fast, having doubled in the first half of this year compared to the same period in 2009.

Meanwhile, Korean regulatory changes should also have the effect of attracting foreign trading volumes.

The Financial Investment Services and Capital Markets Act, enacted in February 2009, dismantled the barriers between different sectors of the financial industry (such as banks and securities firms), driving Korea’s derivatives market into a new era of competition.

Samsung Futures has implemented various products and services to cope with these challenges, says Jeon.

On the commodities side, it was the first Korean firm to develop and commercialise an online quote and order system for non-iron metals on the London Metal Exchange. The company also introduced dollar-denominated EFP (exchange of futures for physicals) contracts to significantly reduce costs for corporate customers.