Financial Associated Press, June 8 (Editor Zhou Xinyang)Hong Kong's financial institutions may not have a good time recently.News of layoffs of Chinese and foreign investment banks has been reported in the market, and some local securities companies have also been exposed to being unable to pay their rents.
Dr. Zheng Lei, who has previously worked in a Chinese investment bank in Hong Kong for many years, and is currently the chief economist of Samoyed Cloud Technology Group, told the Financial Associated Press that the layoffs of investment banks are not only recent, but started last year.Investment banks struggle to hire more staff if they are not profitable.
Wang Xinyuan, who has worked in a Chinese investment bank in Hong Kong for many years, is currently the investment manager of Ping An Life Insurance, told Cailian Press that the investment bank will lay off staff. “It depends on the number of IPOs.
A local Hong Kong brokerage strategist confirmed to the Financial Associated Press that some people in the industry did leave or transfer jobs.
Local brokers can't pay rent?
Bright Talent Securities Finance (01428.HK) announced on the evening of Tuesday (June 7) that the unaudited comprehensive after-tax net profit for the period from April 1, 2022 to May 31, 2022 was approximately HK$64 million.
Yaocai Securities was founded in Hong Kong in 1995 and listed on the main board of Hong Kong in 2010. It is a local securities company in Hong Kong that has been established for more than 27 years.
Recently, pictures circulated on the Internet. The Tsuen Wan branch of Yaocai Securities Finance, a local brokerage in Hong Kong SAR, was posted with a rent arrears banner. .
According to Hong Kong media reports, Bright Talent Securities responded that there was a water leakage problem in the store of the branch, but the owner had not repaired it, and criticized that the problem affected the daily operation and business of the branch.
Yaocai Securities also announced on the Stock Exchange that the first two months of the latest fiscal year by the end of May had an unaudited comprehensive after-tax net profit of 64 million yuan.Yaocai Securities did not have a performance announcement for the same period last year. According to the bank’s disclosure in July last year, the company’s net profit after tax in the first quarter from April to June 2021 was 137 million yuan.
At present, the company has posted a photo of the removed banner on its social platform account, emphasizing that everything is normal.
IPO fundraising drops sharply, investment bank revenue declines
In 2022, Hong Kong stock IPOs will be difficult to compare with the same period last year in terms of number, scale and subscription multiples.
According to statistics, from January to May 2021, a total of 39 companies listed in Hong Kong stocks, raising a total of HK$188.272 billion.In the same period this year, only 20 companies were listed in Hong Kong, and the number was halved. The total fundraising was only HK$16.768 billion, a sharp drop of 91% compared with the same period last year.
The sharp drop in fundraising directly affects the investment banking sector, which earns IPO brokerage fees.
Some investment bankers pointed out that the layoffs of Chinese investment banks in Hong Kong are indeed more obvious, mainly concentrated in the second-tier head and the first-tier tail, because the IPO market is cold after the hot market last year.
The IPO market is booming in 2021, and brokerages are expanding their investment banking teams in Hong Kong. However, due to the poor market conditions this year, the revenue from IPO projects has decreased.
Ryan Capital, which focuses on the Hong Kong capital market, said on its WeChat account that in terms of Chinese investment banks, the list of layoffs rumored to include CICC, Haitong International, CCB International, and Guotai Junan International have all laid off some employees.However, there is also news that CICC and Haitong International have not made any layoffs.
It also said that in terms of foreign investment banks, Goldman Sachs, Credit Suisse, Citigroup, etc. have also laid off some employees, and investment bank recruitment has become conservative, and even if there are no large-scale layoffs, they will not expand.
