Investment banks expand in energy markets

London, March 27 (Reuters) Investment banks are raising their profile in booming energy markets, increasing their trading teams in response to customers' increased need to offset the risks of volatile oil prices.

The newcomers are seeking to challenge the traditional dominance in energy and commodity markets of the two Wall Street banking heavyweights, Morgan Stanley and Goldman Sachs, which are also adjusting to shifting market needs.

New players, as well as those that have been expanding their existing trading and marketing operations in energy and commodity derivatives, are listed below. (For related stories, click on and): ABN AMRO - The Dutch bank, ABN Amro is recruiting five more energy/commodity trading and marketing professionals in the next month or two to complete bringing in external hires to build up a global team of energy and commodity dealers, Wayne Harburn, head of commodity derivatives, told Reuters on March 7.

BARCLAYS - Barclays Capital, a unit of British bank Barclays plc, is already active on the global oil derivatives markets and has been moving into the U.S. power market. It is considered one of the fastest-growing players.

CALYON - Calyon plans to expand its energy trading worldwide to tie up the French banking heavyweight's financing activities with a growing investment boom in the commodities market.

Etienne Amic, Calyon's global head of commodities, told Reuters on March 15 the bank planned by end-year to double its commodities trading team of 45 to add a gas and power trading desk to its oil and metals derivatives operations.

Operating mainly out of London, New York and Singapore, Calyon also will expand its trading operations in Japan, and in Hong Kong, its hub for investor products in Asia, he said.

Calyon, the corporate and investment banking arm of Credit Agricole, France's largest retail bank, was formed in 2004 through the merger of Credit Lyonnais and Credit Agricole Indosuez.

CITIGROUP - A major contender in the risk management realm, said last June it had made dozens of hires to bolster its Houston-based energy trading unit.

It also rebuilt its Singapore oil trading team after most of those traders moved to Merrill Lynch. Citigroup owns Phibro, one of the first big commodity and energy trading houses.

CREDIT SUISSE - The Swiss bank unveiled a 50/50 joint venture with Texas-based utility TXU Corp in May 2004 that was to be the exclusive power trading and marketing vehicle for both companies in North America.

DRESDNER KLEINWORT WASSERSTEIN - Dresdner Bank appointed Martin Fraenkel, previously of Man Investments, as investment banking division DrKW's managing director and global head of its commodities division in November.

''We see opportunities in energy,'' Fraenkel told Reuters. ''We see opportunities for our bank, in particular as a German bank as the European energy market continues to liberalise.'' FORTIS BANK - The Benelux banking and insurance group is aiming to double its energy trading and marketing team between 2006 and 2009 to nearly 50 personnel.

The bank's main target this year was to enter physical markets GOLDMAN SACHS - Goldman Sachs added to its energy portfolio in 2003 when it bought El Paso Corp.'s interest in East Coast Power for 6 million. Its trading subsidiary, J. Aron, doubled its Tokyo energy trading team three months ago by taking three traders from Japan's Mitsui.

JPMORGAN CHASE - The U.S. investment bank last year beefed up its electricity and natural gas trading businesses.

Hirings included three energy executives from industry leader Morgan Stanley.

It poached four senior energy and power markets executives from Morgan Stanley and UBS AG, part of a larger push in 2005 to augment its fixed-income and currency trading businesses by expanding into commodity markets.

MERRILL - Merrill Lynch has been actively hiring traders and marketers in Asia over the past year as it re-enters the energy derivatives business, which it pulled out of in 2001.

The bank signalled its intent with its purchase of power-and-gas trader Entergy-Koch LP in September 2004, following that up by taking on four personnel from rival Citigroup's energy derivatives desk in Singapore.

MORGAN STANLEY - The Wall Street Bank has offered to buy the nearly 90 percent of oil products marketer TransMontaigne Inc.

it doesn't already own for about 7 million, according to a regulatory filing made on March 22.

REUTERS SR RN1433