A group of London shipbrokers have clubbed together to challenge the Baltic Exchange over their role in the market as it tries to sell itself to the Singaporean financial giant SGX.
Eleven brokers have formed Competitive Ship Brokers Limited to campaign for better terms for providing the daily data that forms its lucrative cargo indices including the Baltic Dry, which is used as a bellwether for global trade.
The Baltic, which opened exclusive takeover talks with SGX last month, wants to put its panellists on a formal contract to provide data, compensating them by waiving membership fees.
“This is not just about being paid for the data that we provide, it’s about the future of the shipping and shipbroking industries. Emphatically we’re not trying to derail the sale to SGX – perhaps SGX might even be a better environment for these indices,” said Jeremy Palin of Arrow Shipping, one of the founders of CSBL.
“The devil’s going to be in the detail, but none of us have an issue with signing a contract that satisfies all of us. In the meantime, it would be very disruptive for our clients, and for the freight market itself, if we all stopped providing this data, and we have no intention of doing so at this stage.”
The Baltic is currently owned by a collection of 280 shareholders, some of whom also contribute data to the indices. Executives are visiting stakeholders in Singapore, Copenhagen and elsewhere to discuss the transaction as part of a four-week round of exclusive talks with SGX abou the $100m takeover.
The market has said it will engage with the new broking collective.
“When these proposals are finalised, we are confident they will be recognised as a welcome evolution of the status quo. We do not view this potential acquisition as a threat to panel members but rather as a very interesting commercial opportunity for them which also fully protects the interests of their principals,” said Baltic Exchange chairman Guy Campbell last week.
The maritime exchange is one of the oldest institutions in the City of London, where it has been based in various buildings since 1744. The market endured an IRA bombing in 1992 that blew out the elaborate stained glass windows installed to commemorate those killed in the First World War.
The windows were restored and now stand in the National Maritime Museum in Greenwich. There were hopes that the exchange building’s marble architecture would also be reclaimed, but the dismantled stone blocks have mostly languished in warehouses in the UK and Estonia, where they were shipped in 2007.