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Why Chinese firms are dominating Asian investment banking

In an about turn from 2014, China’s investment banking league tables are suddenly dominated by local securities firms. The sole global institution ranking in the top 10 is UBS.

China’s domestic investment banks have earned record fees of $3.44bn in total for the first half of 2015, a 27% rise on the same period in 2014, according to new data from Dealogic. What’s happened?

Well, for a start, Chinese securities firms are in the relatively privileged position of being in pole position for a lot of IPO market activity. IPOs in China are dominated by the government privatising former state institutions, and the state favours local banks for this underwriting activity. Much of the surge in investment banking fees for the first half has been down to a rise in equity capital markets activity, so this has helped local firms come out on top.

But while the international banks have scaled back in Asia and been rocked by the recent market rout on the Chinese stock market, and subsequent freeze in the IPO markets, local firms have been looking more long-term.

Chinese securities firms are expanding and hiring across the board, both in Hong Kong and in Mainland China. Juenn Chan, Hong Kong-based executive director of HR & Administration at Guotai Junan International, told us last month that almost every Chinese securities firm is recruiting. “Huatai, GF, Haitong, CITIC, you name it,” she said at the time.

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