The recent financial crisis in the US has seen Barclays Plc cherry-picking assets, as it recently acquired the broker-dealer network of the beleaguered investment bank, Lehman Brothers.
Barclays Wealth, the wealth management division of Barclays Plc, has now launched its operations in India. Barclays Wealth currently employs more than 70 people and will take the headcount to more than 100 in the next six months.
Tinesh Bhasin and Priya Nadkarni spoke to Robert Morrice, managing director, Barclays Wealth and chairman and chief executive-Asia pacific, Barclays Plc, on the way forward for the global markets as well as Barclays in India.
Most asset classes across the globe have crashed at the same time. In which asset class do you see the next bull run?
All asset classes were sold off as investors were over-leveraged and speculation was high. We have seen a lot of de-leveraging from big investors and hedge funds. They sold as they had no choice but to sell to minimise losses. This is why there is a complete mark-down on asset classes.
We believe that there is still a long-term bull market that commodities will witness. This can take two or three years to start. There have been some very large moves in foreign exchange. We have seen the pound depreciate by 25 per cent against dollar.
We have seen the yen appreciate against the dollar. When the markets start stabilising, these trends will reverse.
This will give a good trading opportunity. But it is not clear whether any one should do anything yet.
If one gets into the commodity markets, it has to be with a long-term view. The short term does not make any financial sense as of now. Best is to stay out and sense the trend.
How does the way forward look like for Barclays in India?
We have had the private banking operations for a long time -- about 20 years. We can do many investment banking-related activities through the bank and keep adding service offerings. We wanted a platform that can offer products and hence we started Barclays Wealth.
Going forward, we will roll out a cash equity trading and broking business in India.
This would include institutional broking, sectoral coverage, research and so on. India will be the first country in Asia where we will have a full service offering under our investment banking. I would hope that we will be able to manage this in the next couple of years.
Structured products have been in the news for all the wrong reasons. How do you view this considering that you as a wealth manager offer them?
Across Asia, we are definitely seeing less appetite towards structured products. The demand for plain vanilla products is higher as clients are wary of the volatility they have seen across asset classes of lately. Foreign exchange, again, is a good example. Lot more people are coming in. There are two important factors for the investors' attraction. This market always has liquidity and a person can move in and out quickly. As the underlying markets (of individual countries) continue to underperform, I believe in the first half of the next year the investors are going to be interested in structured products once again.
