Transcript
EBC Financial Group is a globally regulated family of brokerage firms, offering a host of trading services: for professional and eligible clients in the UK, and for retail traders in Asia and Latin America. In the second video of our three part series with David Barrett, CEO of EBC Financial Group UK, he reflects on how the group’s clients have embraced index and commodity ETFs, and the forces behind some of the unusual trends in those commodities.
World Finance: David, are there any standout shifts or client interests that you’ve seen in recent months?
David Barrett: Where they’ve changed their trading style because of the volatility that we’ve seen – we’ve seen people being a little broader in the way that they’re looking at markets.
So we recently introduced ETFs: we have index offerings, and we also have a full suite of commodity offerings as well. But whereas before I think people were tending to granulate their exposure into single pairs or particular sectors, things like the ETFs allow them to take a step back. They don’t have to choose the individual stock, they don’t have to choose the particular pair. They can reflect a view across a broader instrument.
And I think if we look at what they’re doing, I do believe that the volatility that we saw in early April has tempered people’s appetite to be all in all the time. And I think clients’ changing opinion of how they should reflect their risk means that they’re using a broader array of products.
World Finance: Commodities have shown unusual patterns this year — how are retail and institutional traders responding?
David Barrett: Commodities have been a bit of a strange one. I mean we see a tremendous amount of gold flow. I think that’s because it’s been moving, it’s been trending, and it’s been a very popular hedge to all of the noise that we’ve seen going on.
But I do believe that gold is a little different. The central banks have been massive buyers of gold – and that continuous demand over the last five to 10 years has started to really become part of the input of people’s rationale of what they’re doing. They understand that there’s an underlying demand.
But we’ve seen it in other markets as well. Oil’s been a really tricky one. Geopolitically, you would have thought oil would be trading up in the stratospheres, but actually it’s a very offered commodity, because the fundamentals show that there is a huge amount of oversupply.
OPEC have been trying to tighten unsuccessfully; countries like Brazil and the US have come online, they’re producing a huge amount more oil and gas. So as soon as you saw any kind of relief in the geopolitical situation, oil fell back very, very quickly. And the reason it fell back is because there are very clear supply and demand issues within those markets.
And I think those kind of conversations are much more active with our clients these days.
World Finance: Looking at your CFD offerings overall, how does EBC make sure that your clients have breadth and depth across global themes, sectors, and risk appetites?
David Barrett: Most of it’s driven by client demand. So, if you look at the way that we’ve developed the product suite that we’ve got, we started off with the basics, and we built that out.
The reason we brought in ETFs, for example, and the reason we brought in single stocks was because clients were asking.
And you put it there, you educate, you try and get the message out. The marketing team do a very good job of explaining why we do these things, how it’s relevant. They’re doing more updates on specific economic events in other countries so if there’s something going on in Chile or Colombia, that’s relevant to copper or other mineral imports and exports.
So what we tend to do is, we tend to add these things because the client wants them, and then introduce them to the broader client remit, because we can explain to them why people are looking at them and why it’s relevant to what’s going on.
And that kind of, being able to offer those different products, means that you stay relevant rather than just being a singular sort of offering.
Watch the final part of this interview with David Barrett: EBC Financial Group expands family of firms to Australia and Mauritius
And if you started here, don’t miss the first video from this shoot: Trading in extreme volatility? Smaller positions, less leverage, and take your time