Wall Street recruiting commodity traders again

WALL STREET firms are again recruiting commodities traders with promises of $1 million (€710,000) bonuses as prices of raw materials from oil to copper double.

Less than a year after oil tumbled a record 54 per cent, Bank of America plans to boost commodity headcount by 25 per cent, London-based Barclays will increase staff by about 6 per cent and Morgan Stanley is recruiting traders in shipping. The banks declined to comment on compensation.

“You are definitely seeing $1 million or more guaranteed bonuses coming back for 2009,” said George Stein of New York-based recruitment firm Commodity Talent. “These bonuses would be for new hires who are ‘movers and shakers’, those who can double the size of business within a short period of time.”

Banks are recruiting after oil increased 94 per cent since February and copper rallied 97 per cent this year.

Assets in commodity mutual funds, indexes and exchange-traded products rose about 19 per cent to $209 billion in the second quarter, according to Barclays Capital.

The hiring also comes after financial firms cut more than 328,800 jobs, or 4.9 per cent of the global total, after credit markets collapsed two years ago.

Goldman Sachs reported a record $6.8 billion in revenue from fixed income, currency and commodities trading in the second quarter. Morgan Stanley said its commodities revenue expanded, without giving a figure. Barclays saw “significant growth”, according to its second-quarter report.

Royal Bank of Scotland Group said first-half commodities income rose 34 per cent to £467 million (€542 million).

“The business is picking up and banks had trimmed so much they are making emergency hires,” said Jason Kennedy, chief executive of London-based Kennedy Associates.

Mr Kennedy said he moved at least 10 people in the last two months with guaranteed bonuses of $1 million, including commodity positions.

Banks were not making such offers last year, he said. – (Bloomberg)