March 7, 2008
Citigroup Inc, the biggest US bank by assets, plans to hire more people in commodities in Asia in the next two years as global raw material prices rise to records on demand led by China and supply shortages.
The bank expects to offer more risk management and investment products in coal, freight, emissions and agriculture, said Ananth Doraswamy, the bank’s regional head of commodities. The company currently has 17 people in energy and commodities in Asia, including seven in oil and metals trading.
Oil, gold and wheat have jumped to their highest ever as raw materials gain for a seventh year. The bank is expanding in Asia commodities after posting a record loss of $9.8 billion in the fourth quarter as it wrote down debt obligations linked to subprime mortgages.
The company has raised about $30 billion to shore up its capital from investors including Abu Dhabi and Singapore, it said Jan. 22. The bank is “investing in areas of growth,” Doraswamy said. Money managers in Asia invest less than 2 percent of their assets in commodities compared with as much as 10 percent in the US and Europe, he said in Singapore on Thursday. Commodities outperformed stocks and bonds in the past year.
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