Danish multi-asset brokerage house Saxo Bank has partnered up with Nasdaq Commodities to offer access to Nordic Power futures contracts. The news is welcome for small and medium-sized enterprises (SMEs) in the North of Europe. For years only bigger companies with substantial operations have been able to afford to hedge their exposure to the energy market.
Saxo Bank’s new offering opens access to a comprehensive solution that enables direct access to the market via the broker’s SaxoTraderGO platform. The news is welcome for SMEs that can now access a level playing field when compared to big businesses in the Nordic region of Europe that have been hedging their energy exposure for years.
The volatility of electricity prices has come to present a variable cost, rarely predictable for companies whose success hinges on accurately taking into account their costs. A number of companies have had to resort to a single dealer for pricing and don’t have consistent access to historical prices at a reasonable cost.
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Commenting on the launch, the Global Head of Listed Derivatives and Index CFDs Sales at Saxo Markets, Patrice Henault, said: “We have seen a growing interest in our utility offering and are glad to be able to add Nordic energy to our offering, that thus far has focused on Dutch energy. We are looking to add more products in 2017.”
The lack of transparency in the market and direct market access for SMEs has now been tackled by Saxo Bank. Corporate clients can now hedge their exposure to power and foreign exchange markets via one corporate trading account.
Granted, the access of SMEs to the FX markets is only one part of the solution. The more complex aspect of the puzzle that such companies face is to have the talent that can appropriately hedge their exposure.
The Head of Nasdaq Commodities, Magnus Haglind, added: “Nasdaq Commodities welcomes Saxo Bank and looks forward to the introduction of a new segment of financial players to the Nordic power market. As part of our long term strategy we see this as a vigorous contribution in Nasdaq’s position as an innovator and a textbook opportunity for SME clients and investors to enter the Nordic power market.”