The talk in the street has never been more diverse with so much optimism and pessimism coming together at the same time. While the local market has seen more positive news coming through, the international channels have in contrast remained more sombre, with less than positive data from the US and European markets, lawsuits against institutions and the brewing uncertainty in the Korean peninsula.
In Singapore, some of the market sentiments within the financial sector are:
• Many long-only money managers are not in a rush to buy in. There is a general impression that the stock market has risen too fast in too short a period of time, in the absence of sustainable fundamentals.
• Many textbook economists are pointing to a period of inflation in the years ahead with more printed money flooding into supply. The preferred hedge is to store up in physical gold.
• Employees who were lucky to keep their jobs last year are starting to feel unappreciated and for not being compensated fairly for their loyalty through recent difficult times.
Some other key trends we have observed in the Singapore market include:
• With limited upsides in their home markets and the increasing strength of Asian currencies (some of which have been allowed to appreciate), institutions are favouring markets in the East over those in the West, and hence are injecting more investments into Asia at a faster pace than before.
• Institutions that had originally considered Singapore purely as a cost centre for hubbing IT and operations, are now increasingly focusing on growing its revenue here. This can be seen in the build-up of sales and trading desks focusing on the Asia Pacific markets.
• It appears that Hong Kong is closing in on the heels of Singapore for being a wealth management hub. After a period of relative inactivity for most of 2008/9, many banks are currently busy recruiting for priority-private bankers.
• Investment bankers have also jumped on the bandwagon, making their rounds with new employers.
• The pay premium for base salaries has returned, though it is largely reserved for asset-acquiring P&L generating positions.
• The growth in front office hiring will lead to a corresponding expansion of middle office roles related to client servicing and reporting.
• For back office positions, salary premiums for job moves are still relatively conservative. Most open roles are for junior to mid level (VP) hires. Supply of talent exceeds demand for director level and above positions.
• Inward migration of senior foreign talent to Singapore can be expected as overseas head offices are starting to dispatch their best talent to ‘take charge’ and manage their biggest growth markets. Eventually a successful stint in Asia would seem almost necessary for anyone aspiring to climb up the corporate ladder back in head office.
With more and more companies looking towards Asia for growth and expansion opportunities, Singapore will remain a strong market in the East, particularly with its business-friendly policies that have been put in place by the Singapore government. The only foreseeable threat to Singapore’s hiring market would tend to be more global in nature.
For instance, markets will rise and fall based on decisions made by rating agencies and the accounting bodies that decide on valuation or mark-to-market practices. More major shocks are to be expected if there is lack of interest in the government bond markets or if there is a major sovereign debt downgrade, which may in turn lead to another chain of write-downs by creditor banks.
The indices may blip frantically in the near term but judging from its performance in the recent global crisis, it would seem that Asia’s emerging markets will be able to ride out any of these shocks in the longer term. The continent should stand to benefit significantly from any uncertainties in the ‘submerging’ markets, and can continue to expect a flight of capital and jobs towards its direction.
The Asian hiring markets have been highly active over the last three consecutive quarters since Q409, and we anticipate that there may be a technical ‘breather’ in the second half of the year as the hiring markets try to stabilise and take stock of their hiring activities vis-à-vis targeted profitability and growth plans.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.
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Mr. Pan Zaixian is currently the General Manager of Kerry Consulting. He also became an Associate Director (Financial Services & Legal Division) at Robert Walters.