Finance Jobs Going Where the Growth Is – Asia

Jason Simpkins — Fri, 04 Sep 2009 15:45:51 +0000

The financial services industry in the United States and Europe is still reeling from the financial crisis, shedding tens of thousands of jobs each month – even a year after the crisis hit its apex.

However, recent evidence suggests that the financial services industry in Asia – particularly China, which was largely isolated from the toxic assets that caused the crisis – is starting to rebound.

Indeed, many global financial firms are picking up hiring in Asia even as broad unemployment continues to rise. The reason: These financial firms want to be most active in the region of the world that has the best potential for growth, as well as the best opportunities for profit.

“The death of the industry has been greatly exaggerated,” Matthew Hoyle, founder of Matthew Hoyle Financial Markets, a Hong Kong-based headhunter for the banking and hedge fund industries, told the New York Times. “I am actually quite excited about the prospects for the rest of the year,” adding that “Things have picked up here — unlike in Europe and the United States, where that’s absolutely not the case,” he added.

Financial firms slashed 19,000 jobs in August – the 21st consecutive monthly drop for the industry, according to payroll processing firm Automatic Data Processing (ADP). The finance and insurance sector has shed 332,000 jobs since the recession began in December 2007. And the losses will likely keep piling on.

Labor Department data set to be released today (Friday) is expected to show the U.S. unemployment rate surged to 9.6% in August after dipping to 9.4% in July. From December 2007 to July 2009, the economy as a whole shed 6.7 million jobs.

“There’s a gradual improvement in labor markets underway in the sense that the monthly losses are diminishing,” said Joel Prakken, chairman of Macroeconomic Advisors LLC and an ADP spokesman. “The disappointing news it that we have several more months to go of job losses.”

There’s a similar story unfolding in Europe, as well. The unemployment rate across the 27 European Union countries rose to 9% in July from 8.9% in June, while the unemployment rate for the 16 countries that use the euro jumped to 9.5%, according to Eurostat.

As in the United States, many of the job losses have been sustained in the financial services sector. European banks and financial firms have cut 140,000 jobs since the third quarter of 2007, according to data compiled by Bloomberg.

About 84,000 European finance jobs are expected to hit the chopping block this year, according to a recent report by City of London Corp.That’s nearly ten times the number of finance jobs the region lost in 2008.

As the Europe’s largest employer of financiers, the United Kingdom will be most affected. It is expected to lose up to 35,000 finance jobs this year.

Employment at British, French and German financial services firms won’t return to its early-2008 highs until at least 2013 the report said. Even then, the United Kingdom will have 10,000 fewer finance jobs than it did in 2008.

The EU financial services industry employed about 1.4 million people and was worth about $315 billion (219 billion euros) at its peak in 2008, according to City of London. However, the entire industry will shrink 6.2% in 2009 and not return to growth until 2011.

“I’m fairly optimistic on the financial sector returning to profitability, but that won’t necessarily feed through to dramatic employment growth,” Alistair Milne, a senior finance lecturer at London’s Cass Business School, told Bloomberg.

Financial firms will be focused on “growth efficiency” over the next four years and “earning money out of the staff they’ve got at traditional businesses” such as fixed income, equity trading and derivatives trading, Milne said.

Asian Growth a Beacon for Financial Firms

While the financial services sectors in the United States and Europe continue to shrink, finance firms operating in Asia are already rebuilding.

Standard Chartered Bank said last month that it would recruit 850 bankers in the next 12 to 18 months. The majority of those hires will take place in China, but significant numbers will also to be added in Singapore and Malaysia.

“We have aspirations to double the industry growth rate and double our customer numbers in three years,” Foo Mee Har, Standard Chartered’s global head of premium banking, told the Telegraph.

Household wealth in Asia, outside Japan, was expected to grow by 12% annually until 2012, she added.

Meanwhile, HSBC Holdings PLC (NYSE ADR: HBC) said last week that it is recruiting more than 100 staff members in Hong Kong, and it plans to add 1,000 employees in mainland China this year.

Vincent Cheng Hoi-chuen, chairman of HSBC’s Asia-Pacific unit, even said that his company hopes Shanghai will grow into a financial center that rivals Hong Kong.

“I sincerely hope that Shanghai will become a financial center, as China is able to have two centers, given its size,” he said. “There should be enough capacity for companies to list in both or either market at the same time, despite more and more companies planning to go public in the capital market.”

And Australia and New Zealand Banking Group, which competes with Standard Chartered, expects to increase its staff in the retail banking business in China more than 10-fold to over 500 by 2012. The company is currently moving ahead with a plan to open more than 20 branches in the country by 2012, up from three currently.

In addition to these recently released plans:

Bank of America Corp. (NYSE: BAC) added five senior staff to its Asia Pacific Commodities team and JP Morgan Chase & Co. (NYSE: JPM) added seven members to corresponding Asia commodities unit.
Credit Suisse Group AG (NYSE: CS) added nine specialists to its Asia sales and trading business. (Credit Suisse’s Asia-Pacific operations are on track to contribute 25% of the firm’s total revenue in coming years.)

And Citigroup Inc. (NYSE: C) said it plans to expand its commodity team in Asia at a “double-digit” pace in a bid to capitalize on rising demand for raw materials.

“Asia will be the biggest contributor to growth in commodity consumption,” Ananth Doraswamy, regional head of commodities, toldBloomberg in an interview from Singapore. “We will need more people in energy trading and metal sales, as well as agricultural products.”

A survey by Singapore-based recruiting firm Robert Walters showed that job advertisements in Hong Kong, Singapore, China and Japan jumped 6.4% in the April-June quarter from the three months prior, the New York Times reported.

That’s not surprising considering that unemployment in Hong Kong, Singapore, and Japan – at 5.4%, 3.3%, and 5.7% respectively – are still relatively low when compared to the United States and Europe. And while unemployment is still an issue in China, that country’s economy expanded by 7.9% in the second quarter, exceeding most analysts’ expectations, and lending credence to Beijing’s goal of 8% annual growth.

Indeed, the finance industry seems to have found greener pastures in Asia, where economic growth is still taking place.

“Asia is seen as a growth market,” Robert Walters’ Mark Ellwood toldThe Times. “Companies are not going out all guns blazing again, but there is once again an appetite to hire in certain areas.”

Finance Jobs Going Where the Growth Is – Asia

Bank Concerns Boost Dollar as Investors Seek Safety

Contrarian Profits — Mon, 02 Mar 2009 17:49:43 +0000

The dollar soared to a three-year high on Monday after a record loss for insurer AIG added to worries that the financial crisis is growing more severe and enhanced the U.S. currency’s safe-haven appeal.

Wall Street sustained heavy losses, extending a global stock market rout as the Dow opened below 7,000 for the first time since 1997, while the dollar hit its highest level against a basket of six major currencies since early 2006.

European Union leaders’ rejection of a mass bailout for Eastern Europe pushed the euro below $1.26, as did a survey showing euro zone manufacturers had their worst month in 12 years.

But the biggest blow came from American International Group , which announced a $61.7 billion fourth-quarter loss, the largest quarterly loss in U.S. corporate history. Earlier, Treasury threw a new $30 billion lifeline to the company.

Analysts said the news reaffirmed suspicion that more turmoil lies ahead, spurring investors to sell stocks for safer, dollar-denominated alternatives such as Treasuries.

“With all the negative news lately — today from the U.S. insurance sector and the European summit — the market is just not prepared to take on a lot of risk,” said Dustin Reid, senior currency strategist at RBS Global Banking & Markets in Chicago. “So you’re seeing people pile into the dollar.”

In New York, the euro was down 0.7 percent at $1.2578 , after hitting a session low of $1.2547, according to Reuters data. The dollar fell 0.3 percent to 97.19 yen .

The euro was hit hard after EU leaders rejected calls, led by Hungary, for a 180-billion-euro aid package to rescue Eastern European countries suffering through a deep recession. The EU agreed only to help countries on a case-by-case basis.

“It keeps alive the story that sovereign risk in Europe is marching higher as there’s still no coordinated package” to address the problem, said Richard Franulovich, senior currency strategist at Westpac Banking Corp in New York.

If not for heavy selling of the British pound against the euro, he said, the common currency would be vulnerable to a push toward the $1.2330-$1.2350 area last seen in late October.

Sterling tumbled to $1.3959, its lowest level since late January, before edging back to $1.3988 , still 2.2 percent weaker on the day.

‘ROLL CALL OF REASONS’ TO AVOID RISK

HSBC’s 12.5 billion pound ($17.7 billion) rights issue, launched at a deep discount after annual profit more than halved and bad debts soared in the United States, also weighed on risk appetite and pushed European stocks lower.

“There’s a roll call of reasons to stay risk averse — the news from AIG, HSBC and worries about Eastern Europe and that is benefiting the dollar,” said Geoffrey Yu, a currency strategist at UBS in London.

Outside the U.S. dollar, only the yen was seeing a bid among major currencies on Monday as it attracted moderate safe-haven buying as equity markets turned lower. The euro fell 1.1 percent to 122.24 yen.

“The global slump in equity prices appears to be offering a lingering lifeline to the Japanese yen, (though) quite why we’re unsure,” said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut.

The yen used to be seen as a safe-haven alternative but has lost some of its luster as data showed Japan’s economy shrank in the fourth quarter as exports fell sharply.

NEW YORK, March 2 (Reuters)

Contrarian Stock Market Investing News - Featuring Bargain Stocks » Insurance Sector

Finance Jobs Going Where the Growth Is – Asia

Asian Growth a Beacon for Financial Firms

Bank Concerns Boost Dollar as Investors Seek Safety