Home Listing rules Hong Kong bankers are desperate for a deal to save their jobs

Hong Kong bankers are desperate for a deal to save their jobs

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Hong Kong’s equity capital markets (ECM) bankers are hoping for a rebound in IPOs after an aggressive recruitment drive in 2021 left many twiddling their thumbs.

“We have increased by about 30% in terms of ECM headcount and our rivals will be similar,” says the head of capital markets at a US firm in Hong Kong. “That’s a lot of cost to bear and if volumes don’t pick up, job cuts are inevitable.”

The Hong Kong IPO market was hit by a double whammy of geopolitical concerns and COVID restrictions, resulting in a weak first quarter. Fifteen companies raised just HK$15.8 billion ($2.2 billion) on the Hong Kong stock exchange in the first quarter, compared to 31 deals worth HK$136.5 billion in the first quarter. during the same period a year ago, according to KPMG.

Bankers are hopeful that activity will pick up in Hong Kong in the second quarter of 2022. Promisingly, KPMG says there is a pipeline of 150 companies applying to be listed in Hong Kong, including 30 in the sectors of health and life sciences.

Hong Kong authorities are also trying to give local bankers a boost. They are revising listing rules to allow big tech companies to go public in a move that will boost the local IPO market. “It can’t happen soon enough. We all hired aggressively last year, especially junior bankers. They will be the first to bear the brunt of the layoffs,” says another senior banker in Hong Kong.

Morgan Stanley retained the top spot in the ECM volume rankings in the first quarter, while Goldman slipped from second place a year ago to sixth place, according to first-quarter figures from Dealogic. BNP Paribas tops the IPO chart after working on three listings worth a combined $295 million.

Weak activity on the Hong Kong stock exchange stands in stark contrast to mainland China, with China Mobile’s $8.8 billion IPO, the largest in a decade, propelling the Shanghai Stock Exchange into the top destination. more active for quotations during the first quarter.

The picture for ECM bankers was equally bleak in other international financial centers as concerns over inflation and the Russian invasion of Ukraine paralyzed primary markets, with ECM activity falling 86% in the States. -United.

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