UOB Global Markets offers a wide range of risk management products and solutions to help our clients manage their market risks across foreign exchange (FX), interest rates, credit, commodities, equities and structured products.

Tapping our extensive knowledge of Asian markets and deep understanding of our clients’ unique financial needs, we provide in-depth market insights and timely advice to our clients to help them make informed decisions in the volatile market environment. We work closely with client segment relationship managers to develop effective solutions that are customised to each client’s needs. Our sales and structuring capabilities and our electronic execution and distribution channels continuously ensure we are well-equipped to help our clients seize the right market opportunities. Our prudent and dedicated approach to the management of our clients’ market risks has enabled us to build enduring client relationships.

In 2016, we expanded our Sales and Structuring teams to strengthen our product capabilities and to serve our customers better. This included the expansion of our product and service offerings to our Financial Institutions Group and Business Banking clients to meet their cross-border financial needs. Our efforts contributed to revenue growth of 13 per cent each over the year before in the respective areas. We also saw the transaction volume of FX and interest rates derivatives grow by more than 30 per cent. Our operating income, however, decreased slightly by 2 per cent and profit decreased by 17 per cent in 2016, due mainly to higher revenue-related expenses and continued investments in employee and product capabilities.

The income derived from the products and services we offer the Bank’s Group Retail and Group Wholesale Banking customers is reflected in the performance results of the respective customer segments.

Interest rates and currency markets are expected to remain volatile in 2017 due to political uncertainty and changes in the monetary and fiscal policy stance in developed countries. The expected increase in interest rates by the US Federal Reserve is likely to have a major impact on global interest rates and FX rates in many countries. The central banks in many Asian countries are anticipated to introduce measures to manage their rising interest rates and volatility in their local currencies.

We expect to see increasing client demand for hedging activities across multiple asset classes, and structured and tailored solutions from UOB Global Markets due to the continued volatility in commodity prices.

Helping Our Clients Manage Market Risks and Uncertainties

The two major geopolitical events in 2016 – the UK referendum and the US presidential election – led to much volatility in global financial markets and allowed us to play an active role in helping our clients navigate the uncertain market. Our Global Markets Sales team engaged them to understand their hedging needs and to provide advisory for their hedging decisions. We also widened our structured product offering across various asset classes to help our clients mitigate the impact from market fluctuations.

We provided our clients, especially those with cross-border operations, timely advice to help them manage their FX exposure through the use of comprehensive hedging solutions. Beyond our focus on customised FX and interest rates solutions, we also tapped our experience in energy and base metals to introduce hedging solutions for bulk commodities such as iron ore and coal.

In addition, we offered cash deployment alternatives such as principal-protected investment products to help our clients utilise their surplus funds effectively. To cater to the growing demand for secured funding, we expanded our reverse repo business to the region.

During the year, we also saw an increase in demand for bonds and UOB-issued principal-guaranteed products such as fixed-interest equity-linked structured deposits. Our clients’ interest in risk assets also rose as global equity markets started to pick up in the second half of 2016.

Across the region, we will continue to build and to strengthen our sales expertise and structuring capabilities to cater to the growing needs of clients.

Connecting Clients to Exchanges Around the World

We offer a wide range of products and services across bullion, futures, over-the-counter commodity derivatives, FX and securities to our diverse client base that includes retail investors, high-net-worth individuals, corporate and institutional clients and hedge funds.

In 2016, we activated our clearing membership on the CME Group, which enables our clients to have both trading and clearing access on its four exchanges, namely the Chicago Mercantile Exchange, Chicago Board of Trade, Commodity Exchange and the New York Mercantile Exchange. The membership is part of our efforts to provide our clients with access to major Asian and global exchanges, including the Dubai Gold & Commodities Exchange, Eurex Exchange, Intercontinental Exchange and Singapore Exchange (SGX).

During the year, the derivatives market in Asia continued to grow in sophistication as financial institutions, companies and asset managers increasingly turned to these instruments to manage their risks. Our clients’ trading volumes in products such as leveraged FX, bullion, over-the-counter derivatives, futures and options, commodities and securities on exchanges around the world increased by 50 per cent in 2016.

This growth is also attributed to the 24-hour trading access we offer for our clients to conduct their transactions across Asia, Europe and the US. To ensure timely, convenient and reliable services to our corporate, institutional and professional clients, we continuously enhance our technology infrastructure and systems, including the provision of internet trading services.