HKEx offers LME chief exec job to veteran metals broker

NEW YORK: Hong Kong Exchanges and Clearing Ltd (HKEx) has offered the job of London Metal Exchange (LME) chief executive to Martin Pratt, according to two sources familiar with the matter, picking a veteran broker to lead the bourse through the most tumultuous period in its 136-year history.

The 42-year-old Pratt, now chief operating office at Triland Metals Ltd, a non-ferrous metals futures broker owned by Japan’s Mitsubishi Corp, was chosen over the LME’s own chief operating officer, Diarmuid O’Hegarty, and Garry Jones, a former CEO of NYSE Liffe, the sources said.

In Pratt, the HKEx is tapping an experienced metals trader who has both knowledge of the LME’s complex trading structure and sufficient distance from the crisis over warehousing that has engulfed the exchange.

Pratt would replace outgoing chief Martin Abbott, who announced plans to leave in June.

The LME and owner HKEx declined to comment.

Picking a market insider over an exchange industry executive may reflect the unique challenges ahead for the new CEO, arguably the most important job in global metals trading. Pratt has spent his career trading commodities and working for LME ring dealers, firms that can trade in the exchange’s open-outcry trading floor known as the ring.

Before stepping into the COO job at Triland in January 2007 he worked for well-known brokers Natixis and Sucden. Industry sources said Pratt’s experience in soft commodities would help HKEx extend its reach outside of metals, while his high profile in the industry also worked to his advantage.

“They’ve got load of exchange experience at HKEx. What they don’t have is metals experience,” said one senior industry source in Singapore.

“Triland represents the traditional trading physical flow. It’s not an investment bank, and he’s not tainted by the warehousing issues,” the source said. “He certainly ticks all the boxes now it will depend on the package they offer.”

Triland is one of the LME’s 11 ring-dealing members, but it doesn’t own any of the warehouses at the centre of a controversy over the rules governing metal storage going back to 2009.

The LME has been damaged by prolonged and scathing criticism over its handling of its warehousing policy, which some consumers say has contributed to record high physical price premiums for aluminum and long wait times to take delivery.

Alongside Goldman Sachs and other banks and traders that now own many of the world’s biggest warehousing companies, the LME is facing several class action lawsuits alleging “anti-competitive behaviour” in aluminum warehousing.

HKEx has said the suits were without merit and the LME would contest it vigorously.

It was not clear if Pratt would accept the job. “Nothing’s been confirmed,” one of the sources said. – Reuters

HKEx offers LME chief exec job to veteran metals broker