WHEN Mark Evans moved into Goldman Sachs in London as a graduate from Oxford University, even this high-flying young Canadian, could hardly have expected to find himself in one of the hottest seats in the bank before he was 40. This week, Mr Evans was named the successor to Moses Tsang as chairman at Goldman Sachs (Asia) - a hard act to follow, say Hong Kong bankers. Around him other Goldman Sachs staff were stepping out - local casualties of the global decline in the fortunes of investment banking and broking houses. The bank has put no numbers on the level of staff changes in Hong Kong, but in an industry in which rubbishing the rivals is an evening entertainment, there has been gleeful anticipation that a lot of the dreaded pink slips will be handed out. Mr Evans stays with his line that, of course, there will be shifts - in and out, but he and his senior executives will give no room to suggestions that Goldman Sachs will bear out mischievous predictions that US banks will prove fair weather friends to Hong Kong. The abrupt, but temporary, retreat of Morgan Stanley Asia from institutional equity dealing in 1991 still provides ammunition for the theories that quarterly earnings reports in New York drive decisions - although anyone who puts that idea to Jack Wadsworth, head of MS in Asia, had better have a thick skin and a good memory for the statistics he will produce to prove the banks' current commitment to the region. Mr Evans dismisses as fatuous the idea of anyone of substance pulling out of the Asian market. 'Big firms cannot afford to be out of big markets. If you are a global firm you have to be in the major global markets. Asia is a major global market. The opportunity costs of not being here now are only getting greater,' he said. Next week, Goldman Sachs opens a representative office in Shanghai, and it will not just be a mail box, says Mr Evans, who is also planning to add other representative offices in Bangkok, Bombay and Jakarta. There will be marginal changes in Hong Kong, says Mr Evans, and these are as likely to be driven by the problems of soaring rents and salaries as they are by world conditions which have left many securities houses staffed for a bull run, but suffering from the claws of the bear. He believes that Hong Kong undersells itself as an international financial market, but should not ignore the impact of competition from other markets. 'Hong Kong must create an attractive lower cost environment if it is to achieve its potential.' The question, he says, is: will an Asia market develop and where will it be based? This is not a foregone conclusion, particularly with Singapore announcing major measures such as opening up its fund management market in dramatic style. Drawing on his experience in London, Mr Evans remembers the city was attractive to Paris or Frankfurt, partly because of its relatively low cost. Like other investment banks in Hong Kong, Goldman Sachs' performance is being partly measured by its success in listing China shares. The more issues, the more virility, it is implied. Not to be seen to be playing a large part is a sign of weakness. Therefore, Goldman's apparent failure to get the New York listing of Shandong International Power Development (SIPD) off the ground recently might have been seen as an embarrassment. On the contrary, Goldman believes that postponing the issue, rather than pushing on at a time when two other power companies, Shandong Huaneng and Huaneng Power International, were languishing on Wall Street only weeks after listing, was in the best interests of both client and investors. Goldman says that trying to push stocks out at too high a price is damaging. Peter Wheeler, head of China business, said: 'There is nothing different happening in China than in any other country in the region; everyone is seeking absolutely the highest price and [is] doing so ill-advisedly. The competitive environment puts a premium on over-promising and not enough penalty on under-delivering.' Mr Evans said: 'A large share of the blame resides with the bankers who for competitive reasons are creating false expectation with issuing clients. We are as proud, or more proud, of the deals we have advised clients not to do as we are of the transactions completed.' Mr Wheeler maintains that putting the brakes on SIPD has not soured relations with the company, the Chinese power authorities or the regulators. And Goldman's name will still be at the top of the prospectus when it finally comes to the market. The company has not decided when to launch the transaction. Together with the Ministry of Electric Power Industry, the company is observing and assessing the post-listing performance of Shandong Huaneng and Huaneng International. A decision on timing will be made once the ministry and SIPD complete the assessment. But Mr Wheeler admits that it might have been better if the the deal had not been launched until the other two power issues had been digested, and it should now wait until the H-share market is looking in sound shape once again. SIPD may yet be destined to fly, but H shares and N shares are nobody's bread and butter, and certainly provide no jam, given the amount of work involved. What keeps investment bankers in employment - although there may be too many of these in Hong Kong right now - is the steady supply of other deals. For some in Hong Kong, it is heavy trading that pays the bills - either on their own behalf or for clients. This is not Goldman's style. As well as its primary markets debt and equities business, it offers full service banking to regional clients - including China. Going back to 1991, Goldman has managed or co-led 26 financings in China. These include a US$300 million sale of interest rate caps for the Guangdong Nuclear Power joint venture in 1991 and co-lead managing China's $1 billion global bond offering this year. It was also co-manager on the prospectus of the $120 million Tsingtao Brewery H-share offer and the $350 million Shanghai Petrochemical float. The dismal performance of China-related securities this year was a swing of the pendulum, said Mr Wheeler. 'As recently as last year, it was all euphoria, with the Shanghai Petrochemical in July and CITIC Yankee Bond in August. People were buying, and the market was booming. The sentiment changed almost exactly with the turn of the year. The index movements show there was too much euphoria a year ago and an overshoot on the side of caution this year. That is true of any market place. I don't think there is any . . . change in attitude. It will come back.' But when? Nobody in Hong Kong really knows, which is why any exits from Goldman should not be a cause for celebration elsewhere. No one can count on being immune to the interest-rate-driven slump in world securities deals.