Now we are coming close to the bonuses season. 2020 has been a journey. Because of the Covid-19, travel restrictions, quarantine requirements and similar issues posed serious hurdles. It has interrupted the basic activities to develop transactions. As a result, it forced the Asia Pacific M&A to put on hold. In the first half of 2020, there has been a 17% decrease in deal value - the lowest since 2013.
Luckily, stepped into Q3, there was multiple good news coming into the market. Eight out of the region's 10 largest deals were announced in Q3. Thanks to the tech sector and tech-related business expanded during the pandemic as most of the deals were driven by this space. As a result, it leads the APAC M&A surged 63%. What is the outlook for 2020 bonuses in Hong Kong financial services then?
Capital Market Expect to Receive Better Bonus Than M&A
"At US investment banks in the city, there are rumours that bonuses will drop 25% to 30% for advisory roles year-on-year for 2020," says Abimanu Jeyakumar, Head of Selby Jennings for North Asia, at interview with eFinancial Careers. Although Q3 has a pick up of M&A activities, maybe tech coverage bankers could be an exception, it might not be able to translate for the whole of 2020.
Good Year for ECM
It has been a good year for ECM. ECM has been busy since August. With all the tech listing, the market capitalisation of IT companies has more than trebled between 2015 and 2019. Although Ant Group's IPO has been suspended, there is a long list of "homecoming listing" including JD.com and Netease. The market predicts ECM bankers in Hong Kong to receive a 10% - 15% bonus increment this year.
"Regardless of the size of their bonus payments, don’t expect many Hong Kong bankers to move jobs after Chinese New Year - which is the usual season for post-bonus hiring," says Jeyakumar. “Most bankers in good firms just want to keep their seats.”
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