Financial and Capital Markets

Well here we are at the end of 2011 in what has been a challenging year in bond and FICC (fixed income currency & commodities) markets.
It's all pretty tight as most teams have had a tough year – lots of effort for not as great reward (per other years).
Specific areas or product are still being sought out, but timing and requirements mean delays in actual hires.
We are hearing that local banks might do some trimming in financial markets and global firms staying steady generally as teams on smaller scale … Asia different story as team ‘right size’.

2. Any trends observed in the last 12 months?

Capital is available, but liquidity is proving the challenge. A general tightening in this side has meant revenues are well down in most FICC businesses.
Rates, Credit and FX have been slower in terms of volume but Commodities still has activity – clearly driven by the resources sector … key is access to balance sheet to provide liquidity to clients.
DCM/Hybrids/Origination whilst significantly less in deal numbers than previous years has shown some activity, specifically corporate side.
ECM has been very quiet again as firms are still pretty well capitalised. Local banks are trying to make a concerted effort in his area, but general lack of volume has meant not a lot of change here.

3. Any views on the next 12 months?

Clients will speculatively consider new hires, but headcount is tight unless there is a special business case or local/regional/global strategy still to implement.
The entry of ‘covered bonds’ (whilst good as a new product area) hasn’t translated to hiring in a general sense as most teams are running from DCM or Securitisation businesses.
As always skills that are in short supply can command a premium – but it’s still more about the firm/brand, the role/scope and people.

4. Any particular interesting observations or case studies seen recently?

Globally there is a clear message that proprietary trading desks and risk are being wound back – evidence locally is by closures of a global investment bank and domestic bank of their proprietary trading desks in the past few months.
Like with Structured Debt and Loan Markets, firms are taking a good look at their offering to market – and will make some hard decisions on what is/not core business coming into year end – again its all about platform !
This is a double-edged sword as some products/team will shrink and others have potential to grow … so an interesting time and clear opportunity for some firms.