Bank of China Ltd is hiring traders and sales staff in Hong Kong as it sets up a high-yield bond-trading platform to boost market share and cement its position as one of Asia's top 10 debt underwriters.
Surging sales of Chinese corporate dollar debt and dim sum bonds (yuan-denominated securities issued outside the Chinese mainland) justify the additional hiring, said Tony Wang, deputy general manager for global markets at Bank of China (Hong Kong) Ltd.
China's fourth-largest lender is seeking to grow as companies step up raising funds offshore to finance overseas acquisitions, he said. He declined to say how many people the bank intends to recruit.
"We are expanding not only in the debt capital markets business but also in syndicate, sales and trading," Wang said in a July 10 interview in Hong Kong. "We are starting high-yield bond trading on a limited, controllable risk basis. That's mainly to make markets for the bonds we underwrite."
In the first half of the year, Asian issuers (excluding those from Japan) sold $106.4 billion worth of debt, which was denominated in dollars, euros and yen, according to Bloomberg data. Companies from China accounted for more than 50 percent of the total.
In the high-yield dollar debt market, Chinese companies issued almost 54 percent of offerings, according to a Bank of America Merrill Lynch index. Dim sum bond sales will jump 53 percent to a record 570 billion yuan ($92 billion) this year, according to HSBC Holdings Plc.
Chinese companies have announced $135 billion of acquisitions since the start of 2014, up 33 percent from a year earlier, according to data compiled by Bloomberg. China Petrochemical Corp raised $6 billion in this year's largest dollar bond sale in Asia with Bank of China among the arrangers.
Bank of China won a yuan-clearing mandate in Hong Kong in 2003, the world's first. In 2007, it helped arrange the first dim sum bond sale by China Development Bank Co.
In April this year, it led China Unicom Hong Kong Ltd's 4 billion yuan issuance.
It is also riding on the government's efforts to promote use of the yuan, which the Society for Worldwide Interbank Financial Telecommunications ranked seventh for global payments in May.
"As the yuan internationalizes, more Chinese companies are expanding overseas, and Hong Kong is their first choice," Wang said. "As a Chinese bank with international experience, we're able to understand their needs and global dynamics."
Bank of China was the leading dim sum bond underwriter until 2010 with a market share as high as 44 percent. This year, it was ranked sixth in a group led by HSBC and Standard Chartered Plc.
The lender may take advantage of recent cuts at global investment banks when looking for new hires, Wang said. Barclays Plc said in May it will cut 7,000 jobs at its investment bank, while ABN Amro Group NV said in June it will cut about 100 jobs as it exits equity derivatives and shuts its Asian markets business.
"We are hiring people every day, but we are also selective," Wang said. "We want people who can bring in market experience and, at the same time, can better understand China, its legal system and culture, especially the Chinese banking culture. It's not an easy job."