Wednesday, March 27, 2024

"Once High-Flying Bankers in Hong Kong Become a Lost Generation"

From Bloomberg, March 24:

Finance professionals with Chinese expertise were highly sought after five years ago. Now, job security is vanishing as deals dry up. 

When Eric Li lost his job after his family-office employer relocated away from Hong Kong, he knew he’d be facing a tough job market. He had no idea how hard it would be.

Seventeen months on, Li is still searching. The bills are piling up — nearly HK$60,000 ($7,700) a month for rent and HK$1 million annually for his kids’ education. The worst part though is the fear, and gradual acceptance, that this is not even rock bottom.

Just five years ago, finance industry professionals with Chinese expertise like Li were sought after by firms from UBS Group AG to Citigroup Inc. Initial public offerings by companies like Xiaomi Corp. and Meituan bolstered Hong Kong’s status as a financial nexus rivaling New York. Their efforts helped to generate more than $6 trillion in market value of mainland Chinese firms listed in Hong Kong and the US.

Now US-China geopolitical tensions have fractured capital markets. Hong Kong IPOs have dried up as stock prices slump and economic prospects wane. President Xi Jinping’s push to step up data security and financial-market regulation has made it harder for Chinese companies to acquire assets or list overseas.

“I thought that China’s upward trajectory and the tighter ties between domestic and global financial markets was a norm — now I realize it might have been just a blip,” said Li, who has also worked at Citigroup. “That’s a scary thought.”

Nowhere is that pain more pronounced than in Hong Kong, the center of such deal brokering. The damage is underscored by the barrage of layoffs by Wall Street firms, the retreat of global capital into the world’s second-largest economy, and the city’s diminishing role as an international financial center.

The number of non-entry-level finance workers looking for jobs in Hong Kong is “in the hundreds,” based on the applicants who work with recruitment executive John Mullally.

“It’s a fragile enough market,” said Mullally, managing director at Robert Walters. “There are more cuts to come.”

Goldman Sachs Group Inc., JPMorgan Chase & Co. and Citigroup have made several rounds of job reductions in Asia over the past 18 months.

One banker who was made redundant by Goldman Sachs said it led her and her peers to evaluate whether to stay in Hong Kong — and even the industry. The drop in IPOs flowing from China means banks will need to consider restructuring across Asia because staff numbers that have risen through past hiring are no longer justified, she said.....


We are already hearing the stories, probably apocryphal, that bankers, too ashamed to tell their families they are unemployed, dress up and head out every morning to idle the day away before returning home.

I say probably apocryphal because similar tales have been told during every major down-turn, all around the world.