WEST PALM BEACH, FL (www.hedgeco.net) – The growth of Asset Management in Asia has prompted Merrill Lynch to expand its Brokerage operations in Asia. Merrill Lynch�s Brokerage operations sufferedsignificant cut backs following the meltdown in the technology sector that led to the bear markets which lasted for about four years. Since that period, this is the first time that Merrill Lynch isexpanding its Brokerage operations outside the United States.

According to news reports, Merrill Lynch has signed a joint venture pact with China to establish operations in the country. There are reports that Merrill is also talking to Japanese authorities for similar deal. Retail brokerage business is the core of Merrill�s business operations; some critics were worried that Merrill may have gone too far with its cuts following the collapse of the technology sector in 2000. Merrill Lynch also cut down on the number of its U.S. brokerage operations as well. Critics argue that when the market recovers, it will be difficult for Merrill to compete with other brokerage companies with such deep cutback in operations.

Significant growth has been occurring in the Asset management business in much of Asia, with China, Japan and India experiencing exponential growth in their asset management sectors. Many analysts believe such trend is just beginning because investors� confidence in equities has been shaken with the recent losses. Hedge funds have benefited from the loss of confidence in equities. Hedge funds apply a combination of trading strategies to profit from the markets regardless of market direction. Such absolute returns have been attracting new investors since the late nineties.

Merrill Lynch seem to be gaining market share regardless, and the firm�s pre-tax profits from its private client business has increased by 23 percent to about $1.9 billion, in 2004 almost doubling its results in 2002. Merril�s nearest rival achieved a pre-tax profit margin of about $1.5 billion.

Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net

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