Morgan Stanley’s (NYSE: MS) Japan Securities Co will spin off its commodities trading operations on May 1st and will increase their personnel count, according to a report from the Nikkei business daily.
The brokerage predicts that Japanese companies will step up their derivatives trading to hedge against price fluctuations in crude oil, metals, and other commodities due to increased demand from China, according to the paper.
The new unit will be a wholly-owned subsidiary of Morgan Stanley and will handle sales to Japanese firms in sectors including shipping, trading and manufacturing.
Morgan Stanley and Mitsubishi UFJ Financial Group Inc’s partnership, which currently does not include commodities trading, will begin to integrate their Japanese brokerage operations next month.
Morgan Stanley has a much larger commodities-trading business than those of its U.S. and European competitors. MS also handles spot trading of crude oil, petroleum products and other commodities.
