LONDON (Reuters) - The head of Geneva-based energy trader Mercuria said in the short term, Britain’s planned exit from the European Union gives London the edge over Switzerland as a place to do business, as the drop in the pound has driven down running costs.
“It’s not very good news for Switzerland... The pound has come down quite substantially versus the Swiss franc over the past couple of months. It keeps increasing the costs of Swiss business versus London business,” Marco Dunand, the chief executive of the firm told the Reuters Global Commodities Summit in London.
The pound staged its largest one-day fall on record, tumbling to a 31-year low, the day after the June 23 vote. Since then, it has fallen by 16 percent against the Swiss franc GBPCHF=, compared with a drop of 18 percent against the euro EURGBP= and a fall of 20 percent to the dollar GBP=.
His remark echoes those of Ian Taylor, the CEO of major competitor Vitol, earlier this week. Mercuria is one of the top five commodities trading houses that also includes Glencore (GLEN.L), Trafigura and Gunvor.
Dunand, however, does not see London losing its edge to other European capitals as a result of Britain’s divorce from the EU following the result of a June referendum that supported an exit from the economic bloc.
“In a way, I don’t think there should be a major impact. London has a center of excellence with certain skill sets that is unique in Europe and it will keep those,” Dunand said.
Mercuria traded 334 million tonnes of oil equivalent and had a turnover of $56 billion in 2015. It has an office in London and in 2014 it bought JP Morgan’s physical trading business which is also in London.
Editing by Alexandra Hudson