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Foreign banks do more equity underwriting but don’t need more bankers

Foreign investment banks are grabbing a bigger share of Japan’s equity underwriting market. But that isn’t translating into increased hiring.

As Japanese firms look to sell more stock overseas, i-banks such as Goldman Sachs and JP Morgan have cashed in.

According to a Bloomberg report, in the last 12 months Goldman Sachs has surged from an 11.5 per cent to an 18.4 per cent share of Japan’s equity underwriting market, placing it as the second-largest underwriter behind Nomura. JPM is now the fourth-largest player, with a 12.8 per cent share, up from 4.7 percent.

Not that any of that has so far resulted in an uptick in hiring.

One senior consultant at a large recruitment firm, who chose to remain anonymous, says equity underwriting recruitment remains a minor sector in Tokyo – one which his firm is barely seeing any action in.

Dan Weston, an investment banking specialist at t2 Tokyo, is facing the same lack of activity, and he isn’t expecting it to change in the near term.

“Overall it will be a tough remainder of the year for equity underwriting. Most of the activity is in Asia and there will probably be no one hiring the rest of this year in Japan,” he says.

Daiwa, Japan’s second-largest securities firm, is a prime example. It has seen its domestic equity underwriting share plummet from over 12 per cent to just four percent, but in July announced it would be adding 100 people outside of Japan for its Asia Pacific underwriting and mergers advisory business.

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