China regulatory move to spur Hong Kong hiring

A move this month by the China Securities Regulatory Commission (CSRC) to ban foreign banks from buying local stockbrokers and investment banks has confirmed something headhunters have long known: when it comes to banking, Hong Kong is the place to do business.

"If you look at the number of banks coming in and buying up office space, you realise it doesn't matter what happens in Singapore or Shanghai, banks prefer to be in Hong Kong," says Aaron Stewart, a director covering structured products at Pelham Search Pacific in Hong Kong.

Stewart says the Hong Kong hiring market goes in cycles, with certain areas displaying explosive growth whilst others remain quiet, with an overall pattern of net expansion that looks set to continue for the rest of the year.

"Debt capital markets and securitization look to be hotting up again, whilst structured credit and equity derivatives have been very busy areas for the last two to three years," he says.

Another executive search firm consultant in Hong Kong says the CSRC ban is likely to encourage foreign banks to hire more staff on the island as opposed to Shanghai to cater to China's fast developing capital markets.

"Chinese companies are more than happy to deal with an international bank based in Hong Kong as opposed to on the mainland, not least since many of them prefer an overseas listing anyway," the expert says.

With the scope for underwriting and trading Chinese equities and bonds and advising on domestic floatations and mergers potentially enormous - estimates predict a $12 billion business by 2010 - then international banks aren't going to let onshore restrictions stop them.

"They'll simply stay where they've always been successful," the consultant says. "Right here, in Hong Kong."