Asian broker survey: The year of retrenchment

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Asian broker survey: The year of retrenchment

Profits are down, salaries are being sliced, portfolios are moving into cash, buyers are getting choosy about the brokers they use. Is it all doom and gloom? Not if you're smart. Markets that were overbroked are losing the dross: that means new opportunities for firms with good counterparty risk. And research is getting better as brokers fight to sell their services to investors. Steven Irvine sketches in the background to the Euromoney/Global Investor 10th annual Asian broker survey.

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These are tough times for Asian brokers. A case in point is Crédit Lyonnais Securities Asia, the highly rated regional broker that cut senior management's salaries by 20% this year. "The highest paid took the biggest cut, while the lowest paid got a 1% cut," says the firm's director of research, Edmund Bradley.

The local firms are having a tough time of it. Indosuez WI Carr cut 10% of its workforce going into 1998 in order to offer "a leaner, client-focused approach to Asian equities" and the most heavily staffed firm, Jardine Fleming, has been quietly trimming too.

The plunge of Asia's 15 regional stock markets helped contribute to one of the worst numbers in Jardine Fleming's history, a profit of only $19 million. Nor does it look as if things are about to improve. As Hong Kong-based broking head Christopher Rampton puts it: "This year is very much about enhancing the franchise rather than enhanced earnings per share.


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