Montel Magazine 1 - 2020 - Page 44

Aas is back Infamous Norwegian power trader Einar Aas has returned to the Nordic power sector as an analyst with a boutique trading firm in southern Norway, though the market is still counting the cost of his multi-million euro default less than two years ago. By Olav Vilnes and Gert Ove Mollestad » [email protected] “We can confirm that Einar Aas has been appointed as analyst at Branden Forvaltning since 1 January. He will not execute any trading activities,” the firm’s chairman, Aasmund Haugsvaer, tells Montel.“It is obvious that he has something to offer us on analysis,” adds the chairman. Aas had been the single most successful power trader in the Nordic market for years. But in September 2018, the Nasdaq exchange put his portfolio into administration for failing to come up with enough collateral on a massive bet he had placed on the spread between Nordic and German power prices. The subsequent default blew a EUR 114m hole in Nasdaq Clearing’s default fund and had massive repercussions for market liquidity in the following months. In the wake of the default, Nasdaq introduced measures including a capital collateral requirement of at least EUR 5m for all direct members, while requiring their maximum exposure to be of half of available liquidity reserves, including credit lines and collateral.“Over time this will clearly see fewer participants on the exchange. The cost has simply become too high,” says Hermund Ulstein, president of the Nordic Association of Electricity Traders. In 2019, Nordic financial power volumes traded and cleared on the Nasdaq Commodities exchange plunged nearly 14.5% year on year to 814.2 TWh, their lowest level since 1998. Norway’s financial services regulator criticised Nasdaq routines prior to the default in a report on the incident released in January, though market players are still awaiting a final report from the authorities in Sweden over Nasdaq clearing’s role. Aas traded in the Nordic market on his own account from 2005 to 2018, largely to avoid public scrutiny of his finances, and before that he worked at Interkraft Trading in Arendal, a town in southern Norway. He also became a direct member of Nasdaq in 2005, which is highly irregular for an individual and no longer possible following his default in September 2018. Aas had strong links to his current employer Branden previously, with the report from Norway’s financial watchdog highlighting the fact he had authorised two of the firm’s power traders to trade on his behalf. The trader was Norway’s top earner in 2013 posting an income of NOK 313m (EUR 32m) before tax, which rose to NOK 833m by 2016. He invested much of the money in luxury properties in Norway and abroad. Before the default, he enjoyed near legendary status in Norway’s trading community and was considered knowledgeable, thorough albeit willing to take large risks. Aas is media shy, never granting interviews or allowing himself to be photographed. Norwegian media largely use pictures taken during his time at Norway’s School of Economics (NHH), where he graduated in 1994, only serving to heighten his mystique. n 44 Montel Magazine 1–2020