"Senior bankers in Asia should be based in Singapore, not Hong Kong"
There was a time, somewhere between early 2021 and mid-2022, when shunting senior bankers and entire trading desks from Hong Kong to Singapore was a thing. Hong Kong was in the grip of a strict lockdown and everywhere from Bank of America to Citigroup, Commerzbank and SocGen were shunting staff out of Hong Kong and into Singapore, where restrictions were less severe.
15 months later, some people are suggesting the trend should continue. "Singapore is the center of growth in South East Asia and probably of the Asian wallet for years to come, so why are so few senior bankers based there," says one local banker. This is particularly the case in equity capital markets (ECM): "North Asia will clearly not pull its weight for a very, very long time," he reflects.
As we noted this morning, Chinese ECM revenues have gone from $1bn in 2021 to just $98m so far in 2023. With Biden throttling US investment in Chinese technology companies, Chinese ECM revenues are unlikely to recover soon, despite a mooted $8bn in semiconductor company listings.
Those withered revenues explain why UBS has jettisoned 80% of Credit Suisse bankers in Hong Kong, why JPMorgan has disposed of Murli Maiya, the Hong Kong-based head of its Asian ECM business (to manage the business out of London) and why banks like Morgan Stanley have been cutting China-focused Hong Kong dealmakers.
Nonetheless, there's still hiring: Nomura, for example, hired Johnson Chui from Credit Suisse as its to manage Asia-ex-Japan ECM from HK in April. Cantor Fitzgerald is currently looking for a head of Chinese ECM. The heads of Asia ECM at Goldman Sachs, Morgan Stanley and Citi are all in Hong Kong right now.
It's not just ECM. Hong Kong remains the location for most of the region's senior traders. HSBC's equities business globally, is, for example, now run out of the Hong Kong market.
Aiden Pestell, a headhunter at Odin Partners in Hong Kong, says this makes sense. "From a hiring perspective, it’s difficult to hire foreigners in Singapore compared to Hong Kong. Taxes are lower in HK and wages are higher here than in Singapore."
With Singapore focused on boosting employment of Singaporean citizens and imposing restrictions on expats, Pestell says it can be a struggle to find expat talent in Singapore. One Hong Kong based trader agrees: "There's a better supply of competent global people in Hong Kong than in Singapore," he says. "And the Hong Kong Universities produce a good flow of graduates who speak Mandarin, which is critical to this market." He says that it helps, too, that people based in Hong Kong service the likes of Korea, Thailand, Vietnam and the Philippines; Singapore is better placed for 'just' India and Pakistan.
Even so, Pestell says the movement of some equities trading desks out of Hong Kong and into Singapore has stuck. But equities traders are still more likely to be based in Hong Kong, he adds. Fixed income traders are more plentiful in Singapore.
One senior equities trader, who recently moved to Hong Kong from London, says he has no regrets. "It's actually a very special place here," he tells us. "Visitors only ever see Central when the Southside is the most stunning scenery." He's not planning on going to Singapore anytime soon.
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