Saturday 1 October 2016

Brexit vote will keep traders working through the night

Ambereen Choudhury and Richard Partington

Published 07/06/2016 | 02:30

JPMorgan offices in Canary Wharf, London
JPMorgan offices in Canary Wharf, London

UK politicians won't be the only ones settling in for a long night as polls close in the Brexit referendum on June 23.

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Global banks including JPMorgan, Royal Bank of Scotland (RBS), Morgan Stanley and Lloyds plan to keep traders overnight to monitor the markets and handle client trades as results of the referendum on European Union membership trickle in, sources said.

Currency traders, whose market stays open 24 hours, are among those most likely to remain in the office as they grapple with moves in the pound that have grown more volatile as the vote approaches. While senior bankers have warned that Brexit could reduce their numbers in the City of London, trading volumes around the vote itself may provide a boon for struggling securities units.

Currency trading revenue at the biggest investment banks fell 32pc from a year earlier in the first quarter, part of a broader 28pc drop in fixed-income revenue, according to Coalition Development.

"A volatile June driven by uncertainty around the UK's EU referendum vote could help foreign-exchange revenues", offsetting the normal seasonal slowdown, Kian Abouhossein, a bank analyst at JPMorgan, said in a note yesterday.

JPMorgan, which is based in New York and has about 16,000 employees in the UK, has booked hotel rooms for traders in Canary Wharf, one source said.

RBS will have a few senior currency traders in London overnight and will handle some trading from its US and Asia hubs, another source said.

Voting will close at 10pm in London on June 23. Hedge funds and banks have reached out to opinion-polling companies about ways to glean insight on the day, staff at the polling firms said last month. The need for information is great because no official exit poll is being conducted for release once voting ends, it's unclear how soon early results will show a clear trend, and a final tally isn't due until the next morning.

Even equity traders who have more set market hours may stay at their desks longer than usual. Mint Partners, a division of BGC Brokers, will have London employees work until 9pm, when US stock exchanges end regular trading, and US and Asia desks will have extended coverage focused on Brexit, said Parag Patel, head of exchange-traded funds trading at the firm.

ETX Capital, a London-based broker of contracts-for-difference, a form of derivatives, will offer food, taxis and a small bonus to incentivise about 20 traders and customer-support employees to work through the night, said Joe Rundle, head of trading. About 60pc of the firm's trades are tied to foreign exchange, and Rundle said he expects this to be the busiest period so far this year. (Bloomberg)

Irish Independent

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