Globally, commodities quantitative analytics roles conventionally existed within banks instead of commodities trading firms. It was the investment bankers who established top tier, global quant teams with exclusive focus in commodities trading at the height of an unregulated commodities industry. Since then, investment banks worldwide have retracted significantly from or exited the industry completely. It has only been in the recent years that merchant traders and producers have really grown to recognize and appreciate the previously overlooked potential value these professionals can add to drive more sophisticated trading strategies.
The world and the commodities industry are still largely driven by the US and European economic and political powers so it is no surprise that the US and Europe are the front-runners of this in-house quant development. Some trading companies were able to quickly attract top talent from investment banks and grew their own quant analytics capabilities. These regions generally, though not without its own challenges, see no shortage in hiring quant talent.
This trend is now spilling over to Asia – a region that has seen substantially lesser roles for quant professionals. Established traders and producers are relishing a period of growth. Overseas businesses who have yet to join Asia’s buzzing trading hub are also making deliberate moves to setup in Singapore. To compare, it cannot be described similarly to the “explosion” of global demand for fundamental analysts as discussed in the article detailing “The Rise of the Career Analyst”. These new opportunities for commodities quants in Asia are still classified as rare. After the initial requirement is fulfilled, there may not be another high level and business critical position available for the next 3-5 years in the same organization. Nevertheless, physical trading firms in Asia are without a doubt seeking to upscale their global and regional trading platform immediately. Finally, merchant traders and producers are making more aggressive moves to bring on board in-house talent.
Cargill, Rio Tinto, RWE Supply and Trading, Citibank, Standard Chartered Bank, to name a few, are some organisations who have made recent hires in this area. Notably within trading firms is a push for highly commercial quant professionals, emphasizing on those heavily involved in trading strategy and idea generation.
But how well equipped is the regional talent pool?
Most of the Asia Pacific talent unfortunately falls short in fulfilling the highly select base requirements for quants, most notably a PhD degree. To clarify, existing Equity, Fixed Income, Forex Quant Analyst with a PhD, experience in a front office position within a trading floor and proficiency in data modelling and programming languages do not instantly qualify for roles within commodities. Arguments can be made to compare the complexities of the markets versus commodities. Employers stand firm on their predilection for professionals with an understanding of physical and derivatives commodities trading. Another uncompromising criterion is exceptional competency in programming languages and experience in complex data modelling.
Mandates in Asia for Commodity Quant Analyst typically seek at least 5 years’ experience in commodities and as a quant since these roles are an increasingly integral part of the commercial business. Additionally, hiring companies assess an analyst’s ability to adapt to company culture, thrive in a high performing environment and communicate strategies well with internal stakeholders. Strong commercial acumen, which can only be developed over time, is essential. Based on both commercial and technical employer requirements, suitable talent is more likely to be found with 10-15 years’ experience.
In Singapore, employers have exercised flexibility to consider professionals with Master’s or strong candidates with a Bachelor’s Degree in high level, relevant mathematics/finance background. Employers are also open to consider foreign quant talent due to a shortage of qualified professionals in the local market.
For commodities quant analysts with relevant commodities and technical experience (data modelling and high proficiency in programming languages) interested in front office quant analyst opportunities in Singapore, please do get in contact for a discussion.
by Dawn Gulanesview my profile