Thinking of migrating to Asia to escape redundancies in the London structured credit market? Think again.
Last week yields on three-month deposits in China and India plummeted as investors withdrew money from local money market funds and credit derivatives.
Hans Redeker, currency chief at BNP Paribas, told the Telegraph events were a “severe warning sign”. He said: “Asia ignored the credit crunch in August but now we’re seeing the poison beginning to paralyse the whole global economy.”
Local recruiters confirm that Asian structured credit hiring is starting to suffer: “There is a demand at a junior level but the market is severely crippled,” says Jeremy Canning, Singapore country head for Morgan McKinley. “There is no end customer client business of note, and resources are not being deployed to the sector.”
Despite reports that hedge funds are sniffing around local markets, recruiters say this won’t influence hiring strategies.
“It may be that hedge funds are bottom fishing in the Asian structured credit space, but I doubt banks will hire any time soon: they are top heavy,” says John Jessen, founding partner of headhunters Smith & Jessen.
The uncertainty has already taken away the bargaining power bankers had during salary negotiations. “Salaries are way off the February highs where these chaps could have named their price,” reports Canning.
“At bonus time, even good performers will be under-paid due to depleted bonus pool allocations in the context of unprecedented losses,” adds Jessen.
Internal moves the only option
If you still aspire to work in Asia, your best bet will be to make the leap internally. Jessen says banks on the Continent are predicting a 10-15% increase in regional headcount in 2008 as a result of redeploying staff away from Europe and the US. “The over-supply of bankers in London may flow eastwards,” he believes. “Some credit people may be converted into other areas, including commodity derivatives, equities, FX and rates, as well as principle finance and public and private financing.”