Morgan Stanley and HSBC join the downsizing trend as markets in China remain sluggish
17 April 2024 - 18:16
by Agency Staff
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Morgan Stanley is cutting at least 50 investment banking jobs in the region, sources say. Picture: REUTERS/Lucas Jackson
Hong Kong — Morgan Stanley and HSBC are cutting dozens of investment banking jobs in the Asia Pacific this week, sources with knowledge of the matter say, as weaker deal activities and sluggish markets in China and Hong Kong weigh on their business prospects.
Morgan Stanley was cutting at least 50 investment banking jobs in the region starting this week, three sources with knowledge of the matter said, affecting about 13% of the Wall Street bank’s Asian investment banking workforce of 400.
Layoffs at the investment banking business unit of HSBC, which makes the bulk of its revenues and profits in Asia, started on Tuesday. The process was expected to see the departure of about 30 dealmakers in the region this week, three separate sources said.
All of the sources declined to be named as they were not authorised to speak to the media. Morgan Stanley declined to comment on the job cuts. HSBC did not immediately respond to a query on Wednesday.
The cuts follow similar measures by other banks stung by a decline in dealmaking activities in China amid a slowing economy.
Staff cuts that began in late 2023 on the Chinese mainland and Hong Kong, key regional investment banking hubs of Western banks, were set to gather pace this year, bankers and recruiters have said.
The top listing destinations for Chinese companies are facing a drought in dealmaking and shrinking valuations. Hong Kong’s stock exchange saw 12 initial public offerings (IPOs) raise HK$4.7bn ($600m) in the first quarter, a drop of 30% year on year and the worst since 2009, according to data from Deloitte.
Money raised via Chinese IPOs plunged 82% from a year earlier to just $2.4bn during the same period, the smallest quarterly fundraising since the fourth quarter of 2018, preliminary LSEG data showed.
The total value of merger & acquisitions with Chinese involvement shrank by 36%, according to LSEG data, pointing to smaller fees bankers earned from clients.
In January, Bank of America laid off about 20 bankers in the region, after a flurry of investment bank downsizing by UBS, Citigroup and other boutique firms.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Investment bankers lose jobs as Asian deals slow
Morgan Stanley and HSBC join the downsizing trend as markets in China remain sluggish
Hong Kong — Morgan Stanley and HSBC are cutting dozens of investment banking jobs in the Asia Pacific this week, sources with knowledge of the matter say, as weaker deal activities and sluggish markets in China and Hong Kong weigh on their business prospects.
Morgan Stanley was cutting at least 50 investment banking jobs in the region starting this week, three sources with knowledge of the matter said, affecting about 13% of the Wall Street bank’s Asian investment banking workforce of 400.
Layoffs at the investment banking business unit of HSBC, which makes the bulk of its revenues and profits in Asia, started on Tuesday. The process was expected to see the departure of about 30 dealmakers in the region this week, three separate sources said.
All of the sources declined to be named as they were not authorised to speak to the media. Morgan Stanley declined to comment on the job cuts. HSBC did not immediately respond to a query on Wednesday.
The cuts follow similar measures by other banks stung by a decline in dealmaking activities in China amid a slowing economy.
Staff cuts that began in late 2023 on the Chinese mainland and Hong Kong, key regional investment banking hubs of Western banks, were set to gather pace this year, bankers and recruiters have said.
The top listing destinations for Chinese companies are facing a drought in dealmaking and shrinking valuations. Hong Kong’s stock exchange saw 12 initial public offerings (IPOs) raise HK$4.7bn ($600m) in the first quarter, a drop of 30% year on year and the worst since 2009, according to data from Deloitte.
Money raised via Chinese IPOs plunged 82% from a year earlier to just $2.4bn during the same period, the smallest quarterly fundraising since the fourth quarter of 2018, preliminary LSEG data showed.
The total value of merger & acquisitions with Chinese involvement shrank by 36%, according to LSEG data, pointing to smaller fees bankers earned from clients.
In January, Bank of America laid off about 20 bankers in the region, after a flurry of investment bank downsizing by UBS, Citigroup and other boutique firms.
Reuters
Weak March numbers put damper on China’s solid first-quarter GDP
Alibaba scraps plans for Cainiao IPO
HSBC to push growth of wealth business in China
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Morgan Stanley’s first-quarter profit beats estimates
Western investment banks brace for more job cuts in Asia
Banks in UK assess China risks
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.