Chinese banks lower funding banking workers in Hong Kong throughout IPO drought


Several main Chinese funding banks in Hong Kong together with Haitong International and China Merchants Bank International have lowered staffing of their funding and fairness capital divisions to chop prices throughout the metropolis’s drought of preliminary public choices, in line with bankers.

Chinese funding banks expanded their presence in Hong Kong final 12 months in a wager on robust demand for secondary listings from US-listed Chinese corporations after new cyber safety guidelines instituted by Beijing halted profitable tech IPOs beforehand destined for New York.

But the variety of public listings in Hong Kong declined sharply within the first quarter of 2022 from a document final 12 months on account of strict pandemic lockdowns, rising geopolitical rigidity between the US and China and Beijing’s regulatory onslaught on the tech sector.

Haitong International, one of many prime Chinese bookrunners in Hong Kong final 12 months, has made a collection of lay-offs throughout all departments in current weeks, whereas China Merchants Bank International, one other Hong Kong-based mainland brokerage, laid off about 10 funding banking workers final month, two individuals aware of the matter stated.

Guotai Junan International, the Hong Kong arm of the mainland funding financial institution group Guotai Junan Securities, laid off a number of of its mounted revenue and IPO principals in early June, the second individual stated.

Some bond financing bankers have been transferred to fairness analysis departments, stated bankers at a Chinese funding financial institution that used to concentrate on the know-how sector.

The Hong Kong inventory trade helped 17 corporations elevate a mixed HK$14.9bn (US$1.9bn) within the first three months of 2022 in IPO proceeds — an 89 per cent plunge from a 12 months in the past, in line with trade filings.

Despite an anticipated choose up for momentum within the second half of the 12 months, accounting agency PwC estimated a full-year drop of about 40 per cent for complete fundraising quantity by HKEX as much as HK$200bn, citing the financial slowdown and regulatory overhang, in line with a report launched on Wednesday on Hong Kong’s capital markets.

The chief govt of HKEX, Nicolas Aguzin, acknowledged “very sensitive” US-China geopolitical tensions in a current interview with the Financial Times. Aguzin stated it was his precedence to persuade traders that China was open for enterprise regardless of Beijing sticking to its zero-Covid regime.

Hong Kong newspaper Sing Tao Daily first reported final week that two Chinese funding banks deliberate to put off about 30 per cent of their Hong Kong workers this 12 months, affecting greater than 100 individuals throughout the banks’ departments.

Haitong International, CMBI and Guotai Junan International didn’t instantly reply to requests for remark.