When Nikko Cordial recently announced it was looking to up its global headcount by almost 1,000, it said the move was partly aimed at tapping into an anticipated increase in demand for securities underwriting.
And after a rough couple of years, the good news is that it isn’t just Nikko expecting good things, says Iwona Bancerek, a consultant at recruitment firm CDS Consulting.
“On the equity side, for example, we saw a sharp decline in IPOs in Tokyo in 2009. There were only 19 of them compared to some 48 in 2008, which itself was considered a ‘bad’ year. But so far this year (through March) there have been eight, and there are high hopes of increased activity in the second half of 2010,” she says.
But while increased IPO activity could spell good news for underwriters, it doesn’t necessarily mean companies looking to grow their underwriting businesses in Japan will find the task easy.
“Underwriting here is very much monopolized by several key players, so it might be hard for any newly created departments to tap into the market potential,” says Bancerek.
Nor will it be easy acquiring enough top talent. Bancerek says a low number of IPOs over the past two years means there are now very few professionals on the market with the kind of experience firms are after.
“Many of those with the relevant knowledge are working for big domestic firms and are unlikely to move. Companies growing their securities underwriting departments will need to train their employees and be creative in the way they source new employees,” she adds.