Equity desks facing the axe as stocks underperform across Asia

Hong Kong

EVEN by the boom-bust standards of Asia's equity business, it's been a turbulent 12 months.

At this time last year, the industry was riding high as China's stock market soared, volumes jumped to record highs and some of the biggest names in finance boosted hiring. Now, turnover is shrinking at the fastest pace since at least 2006 and banks are under growing pressure to either downsize their Asian equity desks, or exit parts of the business altogether.

Investors and issuers are retrenching after Chinese shares crashed, the Federal Reserve tightened monetary policy and divisive political debates from the US to Britain weighed on sentiment. Revenue from trading stocks in China and Hong Kong could fall 30 to 50 per cent in the first half from a year earlier, according to senior executives at four firms who spoke on condition of anonymity. Equity derivatives sales in Asia are on track to drop at least 50 per cent, while prime brokerage is down roughly 20 …