What now for equities careers in Hong Kong as Stan Chart bankers flood market?
Newly redundant Standard Chartered employees in Hong Kong are an unwelcome addition to an equities job market which is already oversupplied with talent.
Of the 200 people laid off globally last week when Stan Chart shut its equities division, the largest proportion were based in Hong Kong – headhunters we spoke to put the local number at about 100, including people working in sales, trading, research and equity capital markets.
“The truth is that most of them won’t be in high demand in Hong Kong – equities teams are still shrinking here,” says Matthew Hoyle, chairman of search firm Matthew Hoyle Financial Markets in Hong Kong.
While 2014 was a good year for Asian ECM – deal volumes for the first three quarters rose 20.4% year-on-year as China lifted its IPO freeze – the sector still suffers from “chronic over capacity” as bankers scramble for comparatively small roles and fees, according to Thomson Reuters.
[efc_twitter text="Recruiters in Hong Kong say the job market for equities-related roles is similarly oversupplied with candidates"] because banks expanded too quickly at the start of the decade. This is not a new problem – in July last year we reported that banks were growing in DCM rather than ECM – but it does now make it especially tough for ex-Standard Chartered candidates to clinch new roles in the equities space, says a Hong Kong headhunter who asked not to be named.
Goldman Sachs, UBS, Morgan Stanley and other heavyweights in the Asian ECM league tables are unlikely to offer a new home to bankers whose former firm ranked a lowly 23rd last year.
So what are the more viable career options? Hoyle says Standard Chartered had a reputation for hiring “very entrepreneurial” equities staff. “They got little support infrastructure wise – ‘find a way to make us money but don't expect any help’ was the attitude,” he explains. “Given this, I would expect SCB people to be more in demand at smaller franchises – HK banks and firms like Jefferies and CLSA – rather than at bulge bracket IBs.”
Mainland firms with a big Hong Kong presence – China Construction Bank, Bank of Communications and Agricultural Bank of China, for example – are another alternative, adds Hoyle. “I would also expect to see some sales traders go into agency brokers.”
Others may leave the financial sector for corporate-development jobs within companies with IPO ambitions in Hong Kong (click here for advice on how to make this move). “Researchers with an equities background would generally be welcomed by conglomerates in Hong Kong who’d want to leverage their network in the financial and investor communities,” says Eunice Ng, director of talent acquisition at search firm Avanza Consulting in Hong Kong.
Ex-Stan Chart researchers who want to stay in banking are also generally in a better position than their trading and underwriting counterparts. “SCB researchers are known for being able to work with little support and being good at digging up relevant info,” explains Hoyle.
However, moving out of equities and into a more sought-after division at another bank will be difficult as Stan Chart’s Hong Kong equities team was dominated by mid-career and senior professionals.“The chances of any of them making a successful transition into something like DCM or risk is pretty remote, except for very junior people,” says the anonymous headhunter.
The plight of Stan Chart’s equities employees contrasts to that of its redundant retail staff, who (as we reported last week) stand a good chance of being hired by other big banks.