Singapore a casualty as Asia stocks and research markets shrink

The stiff competition in Asia's equity and research market has resulted in more casualties, with CIMB Group Holdings reportedly cutting 15 staff in Singapore, including prominent economist Song Seng Wun. -- PHOTO: REUTERS
The stiff competition in Asia's equity and research market has resulted in more casualties, with CIMB Group Holdings reportedly cutting 15 staff in Singapore, including prominent economist Song Seng Wun. -- PHOTO: REUTERS

SINGAPORE - The stiff competition in Asia's equity and research market has resulted in more casualties, with CIMB Group Holdings reportedly cutting 15 staff in Singapore, including prominent economist Song Seng Wun.

When contacted by The Straits Times on Tuesday, Mr Song confirmed that he had accepted a retrenchment package from CIMB Securities, but may rejoin the group under its CIMB Bank operations.

The Business Times had earlier reported the 15 job cuts in Singapore, plus 50 across the region last week, in Hong Kong, Taiwan, South Korea and India.

CIMB's home base, Malaysia, has not been affected by the job cuts.

According to the BT report, the layoffs involved the equities side of the business, largely involving institutional sales and to a lesser extent the research unit.

The paper quoted CIMB's newly appointed group chief executive and executive director Tengku Zafrul Aziz as saying: "It is not an easy thing to do. I'm restructuring and recalibrating the investment banking business to reflect the new realities of investment banking."

The equities business has been a tough one for banks lately because of weak trading volumes, a dearth of big merger & acquisition deals and stiff competition in the market, said Moody's banking analyst Simon Chen.

"When we talk about the equities business we're typically referring to two segments - equity capital markets, which deals with M&A and investment banking deals, and cash equities, which is the brokerage business. On both fronts, conditions have deteriorated in the last 12 to 18 months, driven by a slow economic outlook and also some element of political uncertainty, especially in Thailand," he said.

"Brokerage turnover has been weaker in Singapore and Thailand, which has hit revenues, and the brokerage business is highly competitive. On the equity capital market side, three to five years ago there were very large deals in the region but in the last 12 to 18 months those deals disappeared. More smaller deals means lower fee revenues for these players."

CIMB's move follows similar steps taken by Standard Chartered and Nomura.

In January, StanChart said it would slash 200 jobs, mostly in Asia, as it exited the global institutional cash equities, equity research and Equities Capital Market businesses.

Nomura then said it was cutting about 12 jobs at its Asia equities division in Hong Kong to trim costs and focus on more profitable businesses.