The London Metal Exchange’s possible foray into listing freight derivatives provoked a sharp divergence of opinion among freight industry specialists at a conference in London this week.
Proponents argue that an exchange-traded contract could bring liquidity and transparency to the market. But there is reluctance from brokers, who fear a loss of revenue if what is now an over-the-counter market moves on to the exchange.
Philippe van den Abeele, managing partner of Castalia Fund Management, said at an Oliver Kinross freight derivatives conference in London that a central screen was the only way to increase liquidity in this market. “I’m...