HONG KONG (Reuters) -Two Chinese companies and JPMorgan have become the latest banking groups to cut jobs in China, as a slow recovery in listing and trading activities forces them to tighten cost controls, six sources with knowledge of the matter said. knowledge of the matter.
Beijing-based China International Capital Corp (CICC) plans to reduce its investment banking staff by at least 10% this year, two people with knowledge of the matter told Reuters.
Peer CITIC Securities is cutting about a dozen investment banking jobs in Hong Kong, according to two other sources.
The cuts would be the first major workforce reductions this year at major Chinese investment banks, and would rank among the largest layoffs by Chinese banks since the end of the COVID pandemic, as the country's economic slowdown, Rising tensions between China and the United States and sluggish capital markets have discouraged the negotiation process.
Meanwhile, JPMorgan Chase & Co (N:) laid off at least six bankers in Hong Kong this week, the latest Wall Street bank to reduce its workforce there, two other sources with knowledge of the matter said.
All sources declined to be identified because they were not authorized to speak to the media.
CICC and JPMorgan declined to comment on the job cuts. Citic Securities' offshore platform CLSA did not immediately respond to Reuters' query.
Chinese banks were previously supported by a strong pipeline of domestic listings and smaller deals, but now face plummeting transaction volumes as listings in the country stagnate due to uncertainty in the recovery of offshore markets. Hong Kong.
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Wall Street and European banks took steps during 2023 to cut their investment banking workforces in the Asia Pacific region, and Chinese companies bucked the trend, resorting to job relocation and pay cuts rather than outright layoffs.
In early 2024, Bank of America, Morgan Stanley and HSBC cut dozens of investment banking jobs in Asia Pacific.
The cuts were made as total proceeds raised through initial public offerings (IPOs) in mainland China fell nearly 90% to $2.6 billion during the first four months of the year, the lowest level since 2013, according to LSEG data. .
The main overseas listing destinations for Chinese companies – Hong Kong and the United States – face slower negotiations and increasingly lower valuations.
The Hong Kong stock exchange saw 12 IPOs raise HK$4.7 billion ($600.3 million) in the first quarter, a 30% drop year-on-year and the worst since 2009, according to Deloitte data.
After a $5 trillion drop, Chinese stocks are witnessing some positive outbreaks, with the Hong Kong benchmark index (.HIS) rising 20% from its most recent low in January and gaining momentum.
But uncertainty over the recovery continues to cast a shadow over once-highly paid investment bankers, with most dealmakers based in Hong Kong.
Bankers and recruiters have said they anticipated that staff cuts that began in late 2023 in mainland China and Hong Kong, key regional investment banking hubs for Western banks, would accelerate this year.
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