Key LME broker vows to stay on after HKEx deal

The largest broker at the London Metal Exchange has vowed to stay on after the LME's acquisition by Hong Kong Exchanges and Clearing, as it believes the tie-up would enhance its plans to expand in Asia.

LME director Gavin Prentice, who is also managing director and global head of sales at Marex Spectron, the LME's largest broker in terms of trading volume, said the deal with HKEx would help Marex's expansion in Asia, particularly China.

HKEx announced in June it would buy the LME, the world's largest metal exchange, for £1.39 billion (HK$17.25 billion). Britain's Financial Services Authority granted regulatory approval for the takeover on Thursday.

Prentice said the deal benefits both parties, since it allows the HKEx to diversify into commodities trading and LME members, such as Marex, to expand further into Asia and China.

"Over the past 10 years, the commodities trading volume from Chinese investors has grown 10 to 20 per cent per year. There is a huge opportunity for continued growth in Asia and China," he told the South China Morning Post.

China has become the world's largest consumer of steel and other commodities owing to the many infrastructure and construction projects entailed by its strong economic growth, which is expected to come in at 7.5 per cent this year after several years at more than 8 per cent.

Speaking in his office in Bishopsgate in London, Prentice said that Asia represents about 15 per cent of Marex's commission income.