As bond trading begins to flow from Hong Kong to China for the first time, banks in Hong Kong are hiring extra salespeople – and more trading jobs may be on their way, too.
Northbound trading under the new Bond Connect scheme started earlier this week, giving eligible foreign investors (such as banks, brokerages and asset managers) access to China’s US$9 trillion bond market via the Hong Kong exchange.
Chinese banks have already been bolstering their Hong Kong sales teams in the lead-up to the launch of Bond Connect.
“Chinese debt is the new sexy job. Since Q4 last year CICC, CITIC Securities and BOCI have asked us to recruit institutional salespeople – based in Hong Kong, selling Chinese debt to Wall Street,” says Jason Tan, a partner at search firm Carlson Harriet.
“The hires they’ve made have been Hong Kong and mainland nationals who speak Mandarin and English and have at least 13 years’ experience. These salespeople have received pay rises of 23% on average at Chinese banks,” says Tan.
Western banks have generally not been increasing their sales headcount, although this may soon change. The first day of Bond Connect saw US$1bn worth of trading.
“After day one being so robust, I believe global banks will start looking for some international fixed-income salespeople to market Chinese bonds to their offshore investor base,” says former UBS banker Benjamin Quinlan, now CEO of Hong Kong finance consultancy Quinlan & Associates.
“HSBC, Standard Chartered and Citigroup are among the Western banks likely to hire in sales because they’ve indicated their role as market makers in the new scheme,” says Stanley Soh, a Hong Kong-based regional country director of financial services solutions in Asia.
If Bond Connect fulfils its goal of generating more foreign investment into China, banks in Hong Kong will hire traders to support and execute increased flows, says Quinlan. Foreign investors currently hold only 1.3% of the mainland bond market.
“There may also be a positive knock-on effect in the longer term for FX jobs – hedging RMB exposure – and DCM roles, if the debt capital market picks up because of greater foreign interest in Chinese bonds,” says Quinlan.
In the short term, if you want a sales job in Hong Kong that takes advantage of Bond Connect, you need “onshore relationships” and the ability to “price bonds with strong margins, while delivering returns to Wall Street”, says Tan from Carlson Harriet.
Foreign candidates need not apply. “I recently presented some of the best bond salespeople from New York, London and Tokyo to the heads of fixed income at large Chinese banks,” says Tan. “They were interviewed in Hong Kong but were later rejected because they lacked China bond experience and didn’t know local regulations.”
It’s a similar story for bond traders. “They need to understand how to make profit from the fluctuations in the value of Chinese corporate or government bonds, based on China market conditions,” says Soh. “So knowledge of China’s interest rates and market dynamics is an important point of entry to trading roles.”
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