{"id":2089,"date":"2023-05-08T09:21:21","date_gmt":"2023-05-08T07:21:21","guid":{"rendered":"https:\/\/www.dhcab.com\/?p=2089"},"modified":"2023-05-08T09:27:13","modified_gmt":"2023-05-08T07:27:13","slug":"dubais-growing-commodities-hub-is-now-enticing-london-traders","status":"publish","type":"post","link":"https:\/\/www.dhcab.com\/?p=2089","title":{"rendered":"Dubai\u2019s Growing Commodities Hub Is Now Enticing London Traders"},"content":{"rendered":"
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\u30fbSanctions attracted traders of Russian commodities to Dubai<\/u><\/i><\/b>
\n<\/u><\/i><\/b>\u30fbThe growing hub, low tax is now drawing other merchants there<\/u><\/i><\/b><\/span><\/p>\n

Moving to Dubai<\/p>\n

London\u2019s commodities merchants are following some of their Swiss peers to Dubai, as the emirate moves from being an outpost focused on crude to a major energy trading hub. Dubai has long tried to attract more commodities companies, investing in banking infrastructure and developing exchange-traded futures. Those efforts have helped drive a transformation after the Kremlin\u2019s invasion of Ukraine, with many traders of Russian raw materials rushing to set up businesses in the city as European Union and Swiss sanctions made it harder for them to deal with Moscow. While London has a much bigger commodities presence, more energy traders are now moving or expanding from the UK capital to Dubai.<\/p>\n

London\u2019s commodities merchants are following some of their Swiss peers to Dubai, as the emirate moves from being an outpost focused on crude to a major energy trading hub.<\/p>\n

Dubai has long tried to attract more commodities companies, investing in banking infrastructure and developing exchange-traded futures. Those efforts have helped drive a transformation after the Kremlin\u2019s invasion of Ukraine, with many traders of Russian raw materials rushing to set up businesses in the city as European Union and Swiss sanctions made it harder for them to deal with Moscow.<\/p>\n

While London has a much bigger commodities presence, more energy traders are now moving or expanding from the UK capital to Dubai. They\u2019re being enticed by the growing pool of merchant counterparts and low taxes at a time when traders themselves are raking in unprecedented bonuses. Dubai also offers other lifestyle perks, something that\u2019s becoming increasing important to attract top talent.<\/p>\n

In the past year, Hartree Partners LP and Freepoint Commodities LLC are among those to move energy traders and senior executives to Dubai, according to people familiar with the matter who asked not to be identified. It shows how historic trading centers like London are starting to lose out to the emirate\u2019s growing appeal.<\/p>\n

It\u2019s also part of a broader boom in Dubai and the United Arab Emirates, which is benefiting from an influx of foreign wealth. The arrival of crypto millionaires, bankers relocating from Asia and wealthy Russians shielding assets have boosted property prices.<\/p>\n

\u201cWe have seen well-known hedge funds recently open offices in Dubai as well as independent commodities merchants,\u201d said Jonathan Funnell, a partner at executive search firm Sidley Marion. \u201cThe tax incentives are clear, but for some there is a feeling that Dubai is well positioned to become a major commodities-trading hub.\u201d<\/p>\n

Dubai Becomes New Switzerland for Traders of Russian Commodities<\/p>\n

Dubai has courted commodity businesses for decades, and set up a free-trade zone in 2002. It has since introduced oil and gold contracts, while regional banks increased their offerings to finance trade flows. And companies that trade with Russian producers can do so there without the restrictive sanctions imposed in places like the EU, Switzerland or US.<\/p>\n

For traders of European power and gas the time zone means no early morning starts and the chance to retain more earnings just as the sector is booming. Dubai also benefits from its proximity to some of the world\u2019s biggest oil and gas producers, including Saudi Arabia, Abu Dhabi and Qatar.<\/p>\n

Still, as a commodities trading center it remains much smaller than places like London, Singapore, Geneva and Stamford.<\/p>\n

Dubai Moves
\nHartree is an example of the move to Dubai. It\u2019s expanding its office there to 20 people from 12, including people from London, according to people familiar with the matter. Some of the company\u2019s European power team have already made the move \u2014 including power desk head Brendan Mycock \u2014 and gas traders are expected to follow.<\/p>\n

Freepoint is another major trader expanding in the region. Senior Managing Director Michael Walter was previously based in London, but has begun working out of Dubai. And Andre Dvoretski, formerly of Swedish utility Vattenfall AB, started working for Freepoint as a senior energy trader in Dubai in April, according to his LinkedIn profile.<\/p>\n

Hartree and Freepoint declined to comment.<\/p>\n

The way European power and gas is traded also means you don\u2019t need as many people physically located on the continent.<\/p>\n

\u201cGas and power trading in particularly can be performed with a huge degree of geographical flexibility, given the highly digitized nature of the business,\u201d said Anders Porsborg-Smith, managing director at Boston Consulting Group.<\/p>\n

There have been similar moves in oil. Yaoyao Liu, one of Vitol Group\u2019s star derivatives traders, was previously based in London but now trades out of the company\u2019s Dubai office, people familiar with the matter said. Vitol\u2019s Bahrain office remains its regional hub.<\/p>\n

The company declined to comment.<\/p>\n

\u201cThere\u2019s a lot of interest from our businesses in sending people to Dubai,\u201d said Ian Lowitt, Chief Executive Officer of London-based broker Marex Group. \u201cFor us it will become a really important center, clients are moving there and there are big commodity players from the region.\u201d<\/p>\n

\u2014 With assistance by Anna Shiryaevskaya, Verity Ratcliffe and Elena Mazneva<\/p>\n<\/div>\n

<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

\u30fbSanctions attracted traders of Russian commodities to Dubai \u30fbThe growing hub, low tax is now drawing other merchants there Moving to Dubai London\u2019s commodities merchants are following some of their Swiss peers to Dubai, as the emirate moves from being an outpost focused on crude to a major energy trading hub. Dubai has long tried […]<\/p>\n","protected":false},"author":1,"featured_media":2090,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":["post-2089","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-global-issues"],"_links":{"self":[{"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/posts\/2089","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2089"}],"version-history":[{"count":1,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/posts\/2089\/revisions"}],"predecessor-version":[{"id":2097,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/posts\/2089\/revisions\/2097"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/media\/2090"}],"wp:attachment":[{"href":"https:\/\/www.dhcab.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2089"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2089"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2089"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}