Yuan trading experts in demand
HSBC staff with knowledge of yuan trading could escape the bank's massive lay-off plan as the lender moves to make London a hub for the currency.
The bank, the largest lender in Europe, yesterday announced it was appointing Paul Gooding, who has headed their European credit trading unit for the past seven years, to lead HSBC's team helping London to become an offshore yuan centre. 'Given Gooding's strong markets and product knowledge, he is ideally suited to drive this initiative,'' HSBC said in the appointment statement.
His team will include Hong Kong-based executives Candy Ho, the bank's head of RMB business development for the Asia Pacific, and Thomas Poon, Hong Kong's head of business planning and strategy.
HSBC last year announced plans to lay off 30,000, or 10 per cent of its total workforce, by the end of 2013. This includes 3,000 in Hong Kong.
Jerry Chang, managing director of headhunter Barons & Co, said bankers with knowledge of the yuan did not need to worry about job opportunities. 'The yuan is red hot and Hong Kong, Shanghai and London all want to expand into yuan trading centres,' Chang said. 'This means bankers or other professional specialists in yuan are most wanted in the job markets these days.'
HSBC is not alone in boosting its yuan operations. London-headquartered Standard Chartered Bank as well as Australia's ANZ are also expanding their yuan teams. British law firm Freshfields Bruckhaus Deringer recently also hired lawyers to focus on the issue of yuan-denominated products.
The yuan is not yet fully convertible but, since July 2009, China has allowed companies to use the yuan to settle trades via lenders in Hong Kong. Beijing has gradually relaxed more rules to allow yuan to be used to invest in bonds, insurance and funds products issued in Hong Kong. This forms part of China's ambition to turn the yuan into an international reserve currency like the US dollar.
UK Chancellor of the Exchequer George Osborne last month announced a tie-up with Hong Kong to help London to became a new hub for yuan trading.
A forum formed by banks including HSBC, Standard Chartered and Bank of China will meet twice a year to work out how to promote the yuan.
Louis Tse Ming-kwong, director of VC Brokerages, said HSBC was right to boost its yuan team. He said HSBC could find it hard to compete with Chinese state-owned banks but would do well against other European and US lenders because of its connections with Asia.
HSBC's expansion of its yuan team comes as investors' interest in the currency has cooled. Hong Kong's yuan deposits fell 6.2 per cent to 588.5 billion yuan in December, from 627.3 billion yuan in November, marking a record monthly decline since banks in the city were allowed to take yuan deposits. But Tse believes the drop was short-term.
'For the long term, the yuan is going to be an international currency. Now it is just the beginning and the future growth opportunities are huge,'' Tse said.