Chinese Brokerage Analysts Once Paid Millions Now Face Job Cuts Amid Industry Retrenchment
April 18, 2024 10:51 AM | 2 min read |
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In a significant shift from the recent past, brokerage analysts in China are facing job cuts and pay reductions as the industry undergoes a period of retrenchment following years of growth.
What Happened: A number of senior analysts at the state-owned Guotai Junan Securities Co. have recently resigned due to pay cuts and stricter performance metrics. Additionally, a Shenzhen-based brokerage reportedly laid off 40% of its analysts in Q1 and cut their 2023 bonuses by over 50%. Other firms are cutting back on meal and travel budgets to reduce costs.
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The cutbacks are occurring against a backdrop of a prolonged market slump that is reducing trading commissions and tighter regulatory limits on what research analysts can publish, Bloomberg reported on Thursday. This is a stark contrast to a few years ago when securities firms were aggressively hiring and offering compensation of 10 million yuan ($1.4 million) or more to star analysts.
See Also: Amid Iran-Israel Tensions, China Affirms Support For Tehran, Strengthens Ties
“Now with the trading fees cut, the bubble in the research circle will also burst,” said Sun Jianbo, a former chief strategist at China Galaxy Securities Co. who now runs China Vision Capital, an asset manager in Beijing.
Why It Matters: The retrenchment in China’s brokerage industry comes at a time when the country’s economy is grappling with a host of challenges. Despite faster-than-expected economic growth, Chinese exporters are confronting a complex array of challenges that could impact global trade dynamics.
Moreover, while China’s economy is expected to expand by 5.3% this year, bolstered by the stabilizing property sector and improving external demand, the country’s largest bank has pledged to provide financing for 300 billion yuan ($41 billion) to revive the country’s tourism sector.
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Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
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