Lai See

PUBLISHED : Friday, 15 June, 2012, 12:00am
UPDATED : Friday, 15 June, 2012, 12:00am


Job cuts could send some bankers and brokers to the beach

One of the city's leading finance industry headhunters fired off a gloomy note earlier this week to his clients. 'It's pretty clear that bloodletting is imminent,' said Russell Kopp, who is a managing director with Correlate Search.

Although the industry has had a rough time over the past 12 months and firms have been quietly firing people in dribs and drabs, there is more to come. 'For many employees this will come as a shock - because many of you have been well bid over the past three years.'

Kopp says every time in the past 15 years firms have made significant cuts to their headcounts it has looked foolish six months later, and most firms have been reluctant to cut staff aggressively.

But he says Asian equities between mid-2009 and mid-2011 had one of the biggest bull markets in a generation, with most of this occurring outside the big bulge-bracket firms. Since the global financial crisis, some 25 to 30 new firms have started up. As a result, the industry is still running at very high levels of employment, and something has to give to bring employment down to pre-bull market numbers.

The cuts that are coming mean that, 'with the exception of a few exceptional individuals who will get picked up as 'upgrades', many of those who exit their firms in the near term will either: 1) leave the industry; 2) move down the pecking order, firm-wise; or 3) spend some time on the beach'.

The Adam Cheng effect

Over the years, CLSA has developed a sideline in unconventional stock market analysis. This is principally through the annual market forecast it makes, based on fung shui principles, which it rolls out ahead of every Lunar New Year. It's supposed to be a bit of fun but has become one of its most widely requested research reports.

Earlier this week, it extended its repertoire by joining the debate over the 'Adam Cheng effect' on the stock market. Adam Cheng is a local actor. Every time he has a new television show, local investors fret, as it always seems to be associated with a bear market. In a note, CLSA takes issue with an analysis in the Hong Kong Economic Times that tries to debunk the effect.

'We beg to differ,' CLSA says, 'as it has a strong track record and has a wide following by local investors.' The firm points out that since 1992, the Hang Seng Index has corrected 70 per cent of the time when Cheng's dramas have aired, by an average of 6.6 per cent. CLSA also notes the 'effect' is more pronounced the more tragic the drama and has refined its formula to reflect this characteristic.

The outcome? The HSI could fall another 6 per cent and bottom at 17,650 by the end of Cheng's latest show, which ends on June 29, coinciding with the end of the European Union summit. If the historical trading pattern can be relied on, the HSI should bounce 7 per cent in the three months following the end of the show.

PR firm a gateway to art world

Public relations company Brunswick seems at first glance an unlikely jumping-off point for the art world. But we see somewhat belatedly that Jinqing Caroline Cai, who was a partner in Brunswick's Beijing office, has joined Christie's, the art auctioneers, as China managing director.

'She brings stellar achievements on behalf of countless multinational brands in China, with a depth of expertise in public affairs and corporate relations,' Steven Murphy, chief executive of Christie's, said at the time of Cai's appointment.

That is not all she brings. Her elder brother Cai Jinyong is an influential veteran investment banker and has been chief executive of Goldman Sachs Gao Hua Securities since 2008. He is due to retire shortly.

Some years ago, Kejia Wu worked at Brunswick's Beijing office before departing to join Sotheby's.

Environment trumps economy

A poll by Gallup has found most people on the mainland care more about cleaning up the environment than they do about growing the economy.

Of those surveyed last year, 57 per cent said they believed protecting the environment should be their government's priority, even if this meant slowing the pace of economic growth. Only 21 per cent said economic growth was more important than environmental protection.

In rural areas, 87 per cent said they were satisfied with the air quality, while a surprisingly high 68 per cent in urban areas said they were satisfied. But the figures for the big cities were lower, with 46 per cent in Beijing and Shanghai, and 49 per cent in Guangzhou.