These are exciting times for Hong Kong and China’s initial public offering (IPO) market, as activity there picks up.
Just six months after China Everbright Bank raised US$3.3bn in its Shanghai IPO, the firm recently announced it plans to list in Hong Kong.
The offering, estimated to be a cool US$7bn, is touted to be one of the world’s largest IPO deals. It is likely to take place in the third quarter, reports The Wall Street Journal.
Bank of America Merrill Lynch, BOC International, BNP Paribus, CICC, China Everbright Securities, Goldman Sachs, Guotai Junan Securities, JP Morgan, Morgan Stanley and UBS will underwrite the offer, reports Reuters.
Positive outlook but hiring frenzy unlikely
Does a deal of this size translate into a more active job market? Recruiters we spoke to certainly think so – with a caveat.
“This is likely to continue strengthening the Asia job market, which has been recovering since the GFC,” says Vivian Ng, managing director, Morgan McKinley Shanghai.
“We expect demand in several areas, not only for ECM or financial institution bankers. The news is also likely to raise the market positioning of Asian banks, and enable them to better attract top talent across multiple areas.”
Other positions linked to IPO preparation – such as compliance, legal, finance, accounting and investor relations – could also see an increase in demand, says Eunice Ng, director of Avanza Consulting.
Nevertheless, a hiring frenzy is unlikely. As Morgan McKinley’s Ng points out, the HK listings of mid-sized Chinese banks are likely to be the result of tightening lending and reserves polices in the mainland. “Banks are seeking other ways to raise funds and continue expansion.”
Avanza Consulting’s Ng adds: “This doesn’t mean huge numbers of openings as banks are still cautious. Only experienced folks would be needed, there wouldn’t be openings for those without prior experience.”
Currently, the bulk of ECM and FIG roles are concentrated in Hong Kong with some in Shanghai, followed by Beijing, says Ng from Morgan McKinley.
For now, she says headcount in such roles is adequate given the demands of the market. But she adds: “As the PRC market grows in line with the Chinese government’s commitment to build a financial hub in Shanghai by 2020, this balance will undoubtedly change.”