Front-office hiring at investment banks in Singapore is now largely confined to Indonesian coverage bankers and senior leaders. But the long-term career prospects for investment bankers in the city-state look bright.
As in Hong Kong, global costs constraints mean investment banks are restricting their recruitment in Singapore. There were few vacancies in either equity capital markets or mergers and acquisitions, said Paul Aldrich, managing partner at search firm CTPartners.
Indonesian coverage bankers, however, are in demand in Singapore, said Fabrice Desmarescaux, a partner at search firm Spencer Stuart in Singapore. Indonesia's economy and financial markets have surged in recent years thanks to growth in the consumer, natural resources, financial and infrastructure sectors.
“Banks need to strengthen their coverage and product capability for Indonesia. This requires junior and senior bankers based in both Singapore and Indonesia,” said Desmarescaux. “But candidates need to bring real market knowledge and experience, unlike in the past where Southeast Asia was a destination for internal transfers from outside the region.”
Banks in Singapore are also still willing to pay top dollar for a small number of elite bankers who can generate immediate revenue from their Southeast Asian clients. In the most recent such move in Singapore, Philip Lee, the head of investment banking for Southeast Asia at J.P. Morgan left the firm last week after almost 18 years, reportedly to join Deutsche Bank.
Investment banks in Singapore are telling headhunters that they may lift restrictions on hiring in the second half of this year or in 2014, if deal volumes continue to grow in Southeast Asia.
“The banks are now building pipelines of deals and may recruit more if markets recover later this year,” said Angela Kuek, director of Singapore headhunters The Meyer Consulting Group. “But it’s too early for banks to say how many more people they will need; it all depends on the market,” she added.
Investment banking revenues in Asia ex-Japan fell by 9% in the first quarter of 2013 compared with the same period last year, according to Dealogic data. But revenue in the region that includes Singapore, Indonesia, Malaysia, Thailand, Vietnam and the Philippines saw a 2% rise.
Most banks in Hong Kong already have strong China teams in place, said Clifford Lee, managing director and head of fixed income at DBS, Singapore’s biggest bank. “Now Southeast Asia is the next big market, and as the region’s investment banking hub, Singapore is set to benefit.”
Completed Southeast Asia mergers and acquisitions deal volume jumped from less than $100 million in the first quarter of 2009 to $1.8 billion in the first quarter of 2013, according to Thomson Reuters data.
“Lots of these transactions are routed through Singapore, which is also an active market in itself. Hence investment banks definitely consider Singapore important for future hiring,” said Farida Charania, chief executive of Singapore search firm Nastrac.