Jobs shakeout forecast for Asia-Pacific brokers
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Your support makes all the difference.A MASSIVE shakeout in the Asia-Pacific stockbroking industry has been predicted with around two-thirds of 1,463 analysts covered in a survey released yesterday likely to lose their jobs.
The forecast was made by the London-based firm Tempest Consultants, which launched its first Asia Pacific Rim survey of brokers and investment banking, sponsored by Reuters.
There was nervous laughter in the luxury Hong Kong hotel yesterday where Tempest's Stephen Parker told brokers at the ceremony launching the survey that the industry was too big to justify current volumes of business.
Speaking later Mr Parker said the excess capacity in the Asia-Pacific region was worse than elsewhere in the world because "for a number of years it was easy to make money". The Asian markets' gravy train has hit the buffers in spectacular fashion.
Local and international broking companies have already announced lay- offs but the Tempest survey showed that fund managers are reducing the number of brokers they use. Around 36 per cent of the 155 companies questioned said they were developing in-house expertise to replace services previously provided by brokers.
Mr Parker also noted that some of the stockbrokers with the best analysts were suffering from poor sales and execution departments. When times were good these deficiencies could be overlooked but in current circumstances this made the brokerages vulnerable, he said. Most striking in the survey was that not a single locally-based stock broker managed to score a place in the survey's rating of top performers.
Fund managers chose the Hong Kong-based CLSA economics and strategy team as the best sector analysts. Warburg Dillon Read won the overall best broker research award, Merrill Lynch took the top prize for best broker sales and ABN Amro gained top rating for best broker execution.
Interestingly, the large companies interviewed for the survey produced a different set of assessments of their top broking companies. They voted for Merrill Lynch as best for research, Fidelity Investments as the top fund management group and Goldman Sachs as the best investment bank.
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