Asia not immune

Read the article in the Cayman Financial Review Magazine 

The last few years have seen a shift in hiring patterns of financial professionals around the world. Many bankers, financial lawyers and other professionals have considered a move to Asia, hearing rumours of exotic, recession proof economies. However, Asia has not been immune to global financial turmoil. 

The Asian financial industry is in flux. Local business conditions, expat living issues and home country strength or weakness has impacted on who is hiring, firing and moving in Hong Kong, Singapore and other financial centres in Asia.

The bottom line in Asian hiring and firing has two major themes:
Firstly, Singapore and Hong Kong remain the pillars of international finance in Asia.

Secondly, Asia has been impacted by the global downturn in the financial sector – but does have some potential for the financial professional considering a move to Asia.

Hong Kong and Singapore – Asia’s financial capitals

Asia’s rise as the new global centre of everything has been much heralded, largely on the rise of China growth, India’s potential and the real advances made in many other Asia economies. As the economies have grown, they have attracted financial service professionals to lubricate the gears of business.

Private banking, investment banking, transactions support, compliance and all the services you would expect have proliferated to serve the new giants of industry. As in much of the world, the dramatic rise of the financial servants has sometimes eclipsed the industrial business they facilitated. However, they still rise and fall on the fundamentals.

While the financial centres of Tokyo and Shanghai may have capital markets as big or bigger than Hong Kong and Singapore, they are largely national affairs. Foreigners are only present in very limited roles where very specialised and rare skills are required. Sometimes they work to help Asian firms secure overseas funding and/or listings.

People who moved in when the markets were less mature may have been successful in establishing businesses. However, opportunities for non-nationals are now rare as the local talent firms prefer to hire those with local language skills and contacts. So called-returnees are popular in places from Beijing to Bangkok to Mumbai, but for those who don’t speak an Asian language, your options are limited.

Hong Kong and Singapore, however, are different. Common law from the English tradition, quick and painless visa approval for anyone with a serious job offer, lack of capital controls and sophisticated markets have made them the two key competitors for the title of Asia’s financial capital. The debate rages among professionals as to which is the better city to be based in. The answer usually has as much to do with personal preferences and style as with technical measures.

Who’s hiring?

While some in Europe, North America or the Caribbean may be seduced by the constant stream of media proclaiming the Asia century, it has not escaped the financial crisis. But there are many hiring, capitalising on their strong home country balance sheets to invest while their competitors retreat.

Canadians have been notable in expanding operations in Hong Kong through aggressive hiring and acquisitions in recent years. Long-dominated by a few banks, Canada’s strength was recently validated by Mark Carney’s appointment as the Governor of Bank of England. In Asia, this means that their strong balance sheets are put to good use.

RBC has dramatically expanded its capital markets and wealth management operations in Hong Kong and Singapore. The Bank of Montreal impressed many with their 2011 acquisition of Lloyd George, a leading wealth management outfit in Hong Kong.

They have also quietly acquired new staff and transferred key people out from HQ to build their presence. TD Bank has added new capital markets capability. Bank of Nova Scotia, the biggest Canadian player abroad, has exported investment banking experts in the mining sector to Hong Kong and now has, via acquisitions, almost 700 branches in Thailand1. CIBC has also been expanding.

Australian banks such as Westpac and ANZ have expanded in recent years, but may be slowing down as competitive pressures at home reduce margins.

The Americans have not fared so well. Keefe, Bruyette & Woods unceremoniously dumped their operations in Hong Kong and Tokyo after a takeover by Stifel Financial2. Piper Jaffray also recently vacated Hong Kong and Shanghai34 as did other firms like Rodman and Renshaw Capital Group and Roth Capital Partners after American listings by Chinese firms lost its allure in the wake of accounting scandals. The evaporation of Lehman Bros was a blow to the American presence.

However, key players like Goldman Sachs, JP Morgan and Morgan Stanley seem to be holding the line. On the consumer banking side, Citigroup is closing branches in Hong Kong after expanding in previous years5.

“It is not only American firms that face challenges in Asia, but individual United States citizens as well. The United States taxes its citizens on their worldwide income and has imposed increasingly burdensome reporting requirements on overseas bank accounts,” which, according to Ross Feingold, an investment bank lawyer and the Asia Chairman for Republicans Abroad, “often makes non-US nationals more attractive candidates to financial institution employers in low tax jurisdictions such as Hong Kong and Singapore”.

Europeans have had to retract from certain sectors as their ability to support aggressive projects and, currently unprofitable, investments has shrank with their balance sheets. While Asian operations are often the bright spot in their empires, weakness at home has caused them to retreat. Indeed, in many cases, Asians have picked up European slack. CIMB from Malaysia acquired parts of RBS’s Asia Pacific equity capital markets, corporate finance and cash equities operations and later went on a hiring spree in Australia6.

Malaysians seem comfortable hiring non-Malaysians to fill key roles and are quietly growing in the region. Maybank, Malaysia’s biggest, bought Singapore’s Kim Eng Securities and is expanding into the region. Standard Chartered plans to keep hiring, capitalising on its traditional strength in emerging markets with 1,500 new jobs7. DBS plans to build in Hong Kong increasing headcount by up to 20 per cent8. But Asian banks aren’t all good news. Japan’s Nomura9, Daiwa Securities10 and Korea’s Samsung Securities11 have beat retreats in Hong Kong, resulting in job losses in all firms.

The markets they serve

However, bank strength in the region isn’t solely related to home country strength. Local service specialties and relationships with their hinterlands (China for Hong Kong, South East Asia and India for Singapore) make a difference as well. Also nimble players can capitalise on their neighbours success, for example, Singapore attracts work from Malaysia who’s buoyant IPO market (with over $6 billion listed by October 2012) benefits both jurisdictions12. And the Philippines Stock Exchange has had a banner year that analysts don’t see losing steam anytime soon13.

South East Asia, while comprised of smaller economies, has been a bright spot with fairly steady growth during the global (though really mostly American and European) financial crisis.
Singapore has been more resilient by tapping into Indonesia’s quiet but steady growth. While it does have a China dimension to its financial market services, it is more balanced than Hong Kong.

It also serves, to a greater degree, the Indian growth story. The proliferation of Indian bankers in Singapore, whether of Indian or Singaporean origins, suggests that the Indian market will continue to be a source of hiring for some time to come. Language no doubt plays a role here as Singapore is still more English speaking vs the rise of Mandarin in Hong Kong.

As one executive recently explained, “You don’t need Mandarin to work in Hong Kong, but not speaking it limits your options.” As China has slowed recently, so has Hong Kong, revealing its dependence on its motherland’s continued success. Hong Kong’s strength in equity markets and connections to China made it the strongest in the world in IPOs in the past decade. Indeed, Hong Kong was the biggest exchange in the world for IPOs in 2006, 2007, 2009, 2010 and 201114.

However, the global markets and China slowdown has meant, as some call it, an end to mega IPOs. Some blame the fact that most Chinese SOE’s have already gone public: “The days of $20 billion Chinese IPOs are probably gone,” Fang Fang, JPMorgan Chase & Co’s chief executive officer in China, said in an interview. In July 2010 Agricultural Bank of China Ltd (601288) raised $22.1 billion in Hong Kong and Shanghai, the biggest IPO in history.15 “ Some industry executives estimate headcounts at equity underwriting operations in Hong Kong investment banks to be down by at least 10 per cent16.

Long term, however, the China relationship should work for Hong Kong. Increasing liquidity of China’s currency means Hong Kong’s special privileges should create opportunities in foreign exchange. Hong Kong officials make much of its future as the global centre of RMB exchange.

Singapore’s strength in FICC means that not only has it fared better, but may, given its strength as a currency trading centre, even muscle in on Hong Kong’s RMB exchange business, especially if China’s monetary masters decide they would rather see multiple centres of exchange – not just Hong Kong. It has also made regulatory changes that have made it an attractive centre for wealth management and seems to be attracting regional millionaires – more so than Hong Kong, according to a recent RBC Wealth Management report17.

Living in Hong Kong and Singapore – the Little Dragon vs the Merlion

One of Hong Kong’s biggest challenges has been living environment issues, especially related to the cost of living. Salaries have been high, but rental rates have been rising at the fastest rate in the world since 2007, with a shocking increase of 64 per cent in five years18. Singapore is still cheaper for larger accommodations. Prices over the same period have only risen by 21 per cent19. Although still pricey, it is attractive for professionals with families that appreciate the space.

Education in Hong Kong sometimes seems to be unavailable at any cost. Anecdotal evidence suggests many banks have decided it is not worth the effort of recruiting senior executives, internally or externally, only to have the whole process abandoned when it is discovered that there are no spaces in Hong Kong’s high quality international schools.

Local schooling in Cantonese language and style is a non-starter for expatriates. Even those with children in private schools have been known to quietly send their families back to their home countries just prior to bonus time so they can resign and repatriate when the bonus check clears.

“I was making great money, but with three children costing US$23,000 a year each, plus the school debentures, and rent, there was nothing left!” After quitting (post bonus), this executive’s firm discovered they did have more money to pay him after all – so he stayed. His wife and children are based in his home country and he lives with extended family in Hong Kong.

The education shortage has been raised repeatedly with the government by international Chambers and firms, but there is no immediate relief on the horizon.

By contract, Singapore’s schools seem not quite so full and many local schools are English language and high quality. Cost of living issues and the impact on salary expectations have influenced major banks in their decisions to relocate certain operations to Singapore and mainland China. Clean air is also a consideration, with Hong Kong scoring poorly in air quality vs Singapore’s relatively clear skies. While some believe concerns about the environment are blunted by concerns about job security, it is a constant talking point among regional executives20.

Working in Asia?

Asia has fared better than Europe and the US in recent years and its financial capitals reflect that. The doom and gloom of New York and bitter, if humorous, cynicism of London’s Alex over the past few years has largely been avoided in Asia. Hong Kong has been named the world’s top financial centre by the World Economic Forum for the past two years21 and shows no sign of losing its title.

However, enterprising financial professionals considering a move to Asia should consider their prospects realistically and preferably well-researched. The hiring scene is a mixed bag with European firms retreating, Americans holding the line and Canadians and Asians often expanding.

While Hong Kong does have dynamic China to its advantage, rising costs and a dependence on equity markets may blunt its advantages. Hong Kong’s red meat and energetic character better suits aggressive international financial executives’ thrill for adventure, but Singapore may better suit their families and their Anglophone language capabilities. While it may be the Asian century, and probably the Asian finance century, it isn’t for everyone. If you think you have the taste for adventure, make your way to Hong Kong or Singapore and get your slice of the Asian promise.

With special thanks for fact-checking to Ross Feingold, a Hong Kong based investment bank lawyer and the Asia Chairman for Republicans Abroad.  



  1. Robertson, Grant Scotiabank battens down the hatches as hurricanes threaten branches The Globe and Mail 6 Aug 2012
  2. Toonkel, Jessica Stifel to Buy KBW in deal valued at $575 mln Reuters 5 November 2012
  3. Philbin, Brett Piper Jaffray to Exit Hong Kong The Wall Street Journal. 25 July 2012
  4. Chu, Kathy Reversing Course on China The Wall Street Journal 12 November 2012
  5. Chan, Ray Citigroup to close six HK branches South China Morning Post, p.A1. 7 December 2012
  6. Permatasari, Soraya CIMB Hires Analysts, Traders in Australia After RBC Purchase Bloomberg 17 July 2012
  7. Standard Chartered to pay US$330m settlement on Iran South China Morning Post, Thursday, 6 December 2012.
  8. Bloomberg DBS to add bankers for Hong Kong, China corporate business South China Morning Post, 10 December 2012
  9. Chan, Ray Citigroup to close six HK branches South China Morning Post, p.A1. 7 December 2012
  10. Daiwa laying off about 100 Hong Kong staff MarketWatch 15 February 2012
  11. Espinasse, Philippe Samsung Securities: Hong Kong Swan Song IPO: A Global Guide 8 February 2012
  12. Venkat, P.R. and Ng, Jason IPOs, Made in Malaysia Deal Journal 1 October 2012
  13. Austria, Jennifer B Stock Market poised to sustain Bull Run
  14. Cowan, Lynn Hong Kong IPO Market Loses Its Edge The Wall Street Journal 13 June 2012
  15. Hu, Fox and Wu, Zijing Bankers See Fees Fade as China Era of Jumbo IPOs Draws to a Close Bloomberg 5 December 2012
  16. Bloomberg. Era ends for mega IPOs South China Morning Post, p.B10. 7 December 2012
  17. Tong, Stephanie Singapore Tops HK as Residence for Mobile Rich in Asia Bloomberg News 10 December 2012
  18. Searching for solid ground The Economist 12 August 2012
    19 ibid.
  19. Hong Kong: Asia’s third most liveable city, but among the world’s worst for air quality 17 April 2012
  20. Jones, Huw Hong Kong named top financial centre for second year Reuters 31 October 2012



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G. Andrew Work

Andrew Work is a Founder of The Lion Rock Institute, Hong Kong's first economic think tank.  He was the Executive Director of The Canadian Chamber of Commerce in Hong Kong, instrumental in growing membership and advancing business policy objectives.  He has lived in Hong Kong for 16 years.   


G. Andrew Work 
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The Lion Rock Institute

The Lion Rock Institute was founded in 2004 by Andrew Work, Simon Lee and Andrew Shuen. Lion Rock believes in the potential of the individual and free market values to provide the strongest base for guiding successful government policy in Hong Kong.

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