MF Global (MF.N) has closed its Asia fuel oil swaps broking desk following the departures of all its brokers for the product, the company said on Wednesday.
We can confirm that the fuel oil desk in Singapore is no longer a part of MF Global. We have no plans at this time to restart the desk, a company spokeswoman in New York told Reuters.
She said all of the company's six fuel oil brokers had left.
Industry sources earlier said four brokers -- three senior and one junior staff -- resigned on Wednesday after two other senior brokers had quit earlier this month.
MF Global Holdings, parent of MF Global Singapore, said last month it would cut its workforce by up to 15 percent after the futures and options broker posted an unexpected quarterly loss of $96.5 million.
It was coming for a while. Two of their senior brokers left earlier this month and haven't been replaced. The marketplace is overcrowded with too many broking shops and not enough volumes to keep all of them going, an industry veteran said.
They froze hiring earlier this year and also have a new management team, who wanted the business to trim costs and cut its workforce by 10-15 percent.
MF Global is the second company to exit the fuel oil broking business this year, after Nittan Capital, a unit of Japanese money broker Central Tanshi, shut its oil-broking desk about three months ago.
Its exit from the fuel oil OTC market leaves the sector still overcrowded with seven firms -- BGC Radix, Ginga Petroleum, PVM, OceanConnect, TFS Energy, Amerex and ICAP, industry sources said.
Oil major BP's long-serving fuel oil and bunker teams also resigned last month, with at least 13 people including traders and support personnel leaving en masse over a three-week period.
DISTILLATES DESK OPERATING
With the departure of its fuel oil team, MF Global is left with a distillates desk in the oil swaps broking business. The company said the six-person distillates desk is still operating.
MF Global entered the Asia OTC business some three years ago, launching its business with fuel oil and crude.
After about a year, it closed the crude desk and revamped its oil products broking desks, replacing its fuel oil team with a new group of senior brokers who had left broking firm GFI (GFIG.O). It also hired a new distillates broking team of seven.
At its peak, the fuel oil desk had six brokers, while the distillates group had seven.
The firm in March appointed a new chairman and chief executive officer, Jon S Corzine, a former governor of the state of New Jersey and former chairman of Goldman Sachs.
Corzine said last month that the group's fiscal 2010 performance was completely unacceptable.
In a series of moves to rein in costs, MF Global said it would reduce staff by 10 to 15 percent from a workforce of about 3,200 in the current quarter, freeze new hiring, reduce compensation, and eliminate or postpone initiatives that were not central to the company's direction. (Editing by Ramthan Hussain and Jane Baird)