Baltic Exchange new Asia head eyes stronger regional presence

Singapore

MORE than two years since Singapore Exchange (SGX) sealed its £87 million (S$156) purchase of Baltic Exchange, one of London's oldest establishments, the latter is poised for a stronger presence in Asia.

Founded in 1744 as a forum for chartering vessels, the Baltic Exchange produces benchmark indexes for global shipping rates and owns a trading platform for the freight derivatives market. It was bought over by SGX in November 2016.

Now led by a new Asia head, Lu Su Ling, the subsidiary of SGX intends to complement London and wants to capitalise on Singapore's strategic position as both a maritime and commodities trading hub.

"With a growing base of members from the Asian region and more chartering activity handled by Singapore-based owners, brokers and traders, the need for a stronger Baltic presence in the region is obvious," it said in a corporate brief.

Since Baltic joined the SGX family in November 2016, there has been a marked growth in the number of Asian members. Of Baltic's over 650 corporate members, about 20 per cent count Asia as their country of origin. Three-quarters of these joined Baltic in the last 10 years, and around 40 have joined in the past two years alone. However, while Baltic has a strong profile in Singapore, there is still much work to be done across the rest of the region, Ms Lu said, as the company membership is "more than just data".

"It's the custodian of an extremely valuable set of data used not only in the shipping industry but in the wider business community. It's my job to help Baltic take this further."

Ms Lu, who has been with SGX since 2001, assumes the position vacated by Chris Jones, a former shipbroker with over 40 years of experience. Mr Jones left the company after five years around the middle of last month to pursue his personal interests.

A chartered accountant by training, Ms Lu was last chief operating officer of Energy Market Company, another subsidiary of SGX. Before that, she headed SGX's post trade services, equities and fixed income as well as corporate and market strategy.

As Baltic's Asia head, Ms Lu is responsible for "driving business development activities in Asia including membership engagement and growth, and promoting Baltic index data and escrow services".

The latter was a project led by Mr Jones. The service, which went live on Oct 15, allows members to hold deposits for ship sale transactions in a neutral third-party account with OCBC Bank in Singapore. It is subject to SGX's detailed know your client (KYC) and anti money laundering (AML) compliance procedures.

In addition to rolling out the escrow services, the commercialisation of the Freightos-Baltic partnership is also high on Ms Lu's agenda. Launched in 2018, Baltic and Freightos, a digital container freight platform, are working closely on the FBX Index - a weighted average of the 12 underlying route indexes, while setting the stage for derivative financial instruments in the future.

Also joining Baltic is Andy Simmonds, who joins as a senior freight market reporter; Nadia Mirza, a former shipbroker, will lead container business development; and Mark Ma, a former tanker chartering specialist, has come onboard as the Asia-Pacific sales manager.