A landmark new scheme launching next month, which gives Hong Kong and Shanghai investors the ability to buy shares in each other’s stock exchanges, is set to generate jobs at brokerages in both cities. So far finance-tech and compliance professionals have been the main beneficiaries, but more front-office jobs are on their way.
The mutual market access scheme, known as Shanghai-Hong Kong Stock Connect, is seen as a critical step in opening up Chinese capital markets and boosting connectivity between mainland China and Hong Kong.
Headhunters in Hong Kong and Shanghai haven’t seen a surge in front-office recruitment yet – but say brokerages will invest in new sales staff once revenues increase as a result of the scheme.
“Front-office hiring will ultimately depend on how successful the scheme is after it’s introduced and how effectively it grows, but I’d expect research analysts and sales people to be in high demand at brokerages,” says Alistair Ramsbottom, managing director of Shanghai search firm The Blacklock Group.
Mainland firms will dominate recruitment in the wake of the market access scheme, although some Western institutions, particularly those with established mainland joint-ventures, such as Goldman Sachs Gao Hua, JP Morgan and UBS, are also tipped to hire by headhunters.
Citic Securities, the mainland’s largest securities house by revenue whose takeover of CLSA last year boosted its foothold in Hong Kong, is among the most likely Chinese firms to expand as a result of the mutual access scheme. Other domestic brokers expected to hire include CICC, Haitong Securities, China Merchants Securities, Guotai Junan Securities and Shenyin Wanguo Securities, according to Ramsbottom
“There’s no doubt that Chinese brokers and securities firms will reap the main benefits from this new scheme – it makes it easier for them to penetrate the HK market,” says Moncef Heddad, founder and managing partner of MH Search & Advisory in Hong Kong. “Mainland players offer competitively priced securities products. They may not be as sophisticated as those from Western banks, but they do the job and keep the wheels spinning."
While front-office hiring is still in the pipeline, IT recruitment is already a reality. "I’ve recently seen new IT roles come up because of the increased technical complexity of trading on two exchanges,” says John Mullally, head of financial services at recruiters Robert Walters in Hong Kong.
“These are mainly contract positions at Chinese brokerages, who have the most urgent need to upgrade their trading systems,” adds Mullally. “The most labour-intensive period for IT development is now, pre-launch, and in October in the immediate period after launch when glitches will need to be fixed. Right now IT people are working weekends, but we’ll have to see whether the contractors are kept on long term.”
Mullally says brokerages have also hired compliance staff to ensure they conform to the regulatory requirements of Shanghai-Hong Kong Stock Connect.
In the same vein to Hong Kong’s emergence as an off-shore RMB hub, the granting of mutual market access demonstrates the increasing interdependence of finance services in Hong Kong and China. “Certainly Mandarin is becoming a more and more important skill for finance jobs in Hong Kong, as are cross-border regulatory skills and the ability to understand and work with the mainland market,” says Ramsbottom from The Blacklock Group.