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The incredible HK equities skill shortage

“Almost everyone in Hong Kong is hiring in ECM these days. For the past two quarters, demands on the already thin talent pool have increased, with every investment bank’s declaration to improve its ECM share,” comments Gary Collister, director of front office search, Connected Group.

Other recruiters reckon this period of musical chairs in Hong Kong will continue throughout Q3 and into Q4. “What makes it different this time round is that the talent war has been spread evenly throughout the institutional tiers, with such firms as Macquarie, Daiwa, Bank of China, JP Morgan and Deutsche Bank all competing against each other to attract the best candidates,” says one source who asked not to be named.

Richie Holliday, managing director, Morgan McKinley Hong Kong, says HK investment banks are experiencing a shortage of staff with sufficient depth of knowledge across all equities product classes. “This is especially so for equity derivatives, where demand far outstrips supply on a local level,” he adds.

And the lack of talent isn’t just up front. “The return to high levels of trading in these products has meant a return to hiring in the back office to support these increased volumes. Specific jobs such as trade support and settlements, as well as product and business unit control, are desperately understaffed in some houses,” explains Holliday.

So how are banks in HK trying to source equities staff? Mainland China isn’t helping much. Its equity trading platforms are smaller and more vanilla than Hong Kong’s. Singapore, meanwhile, is generally better at providing fixed income, currency and commodity professionals.

Unsurprisingly therefore, i-banks often have to take talent from Europe and the US. Holliday says they are also “raising salary bands for these product classes to attract key players from local competitors, and opening up positions to people with derivatives knowledge from the fixed-income classes of credit and rates, and then looking to retrain on equity variants.”

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