Samsung to cut back HK operations
Samsung Securities, the largest brokerage firm in South Korea in terms of market value, said it would make cutbacks in its Hong Kong office.
With more than 80 staff, the Hong Kong operations are Samsung Securities' biggest outside South Korea and would be the only overseas office affected by the restructuring, a spokesman in Seoul said.
'The downsizing will be limited to Hong Kong,' he said. 'A challenging market environment is the main reason. Some global investment banks have already announced the downsizing of their Asia businesses.'
Staff were told the news during a town hall meeting late yesterday, raising speculation that further bad news might be in store.
'Things are really quite bad. They will close down the whole operation in Hong Kong,' a person close to Samsung Securities said.
A company insider said the staff were told that entire equity sales and research teams would be laid off.
A Hong Kong-based banker said the brokerage would probably close down because of ebbing interest in Asia stocks, which fell farther than developed-market stocks when the euro-zone debt crisis hit last year. About 20 of the Hong Kong staff worked in brokerage services.
The spokesman in Seoul denied any plan to completely shut down its business in Hong Kong.
'Our Hong Kong business has three major divisions,' he said. 'They are Hong Kong equities brokerage, Korean equities brokerage and Hong Kong investment banking ... some divisions may close temporarily.'
He also denied that the group planned cutbacks at offices in Tokyo, Shanghai, New York and London.
Samsung declined to confirm the number of job cuts, but said it would release further details today.
The Hong Kong office was opened in 2001, according to the company's website. It was renamed Samsung Securities Asia in 2009 when the company injected an additional US$100 million into the office, aggressively hiring more than 50 extra staff to expand into investment banking, proprietary trading, hedge funds and Asian equities brokerage.
A person close to the matter said the money invested in the Hong Kong office had almost dried up because of 'challenging market environments'. He said the company had decided to slow down overseas expansion and turn its attention to business at home.