For students like Sun Jiaxuan at the National University of Singapore, the future of finance is all about high-frequency trading firms, not the Wall Street banks that graduates once aspired to. Recruiters from DRW Holdings, a Chicago firm that’s expanding in Asia, found that out last month when they visited the school.
“The future is HFT, it’s like a superstar in the finance world,” said Sun, 23, who is studying for a masters in financial engineering. “The big banks are cutting a lot of head count, closing trading desks even in Asia, that sounds like a scary place to be.”
High-frequency traders, which over the past decade have taken over many traditional banking roles in the US and European capital markets, are expanding in Asia. American firms including DRW, Virtu Financial and Jump Trading are hiring, while local outfits such as Grasshopper and Eclipse Trading have plans to expand. Meanwhile, international banks such as Morgan Stanley, Barclays and Macquarie Group are cutting trading jobs in the region.
“Everyone who’s a somebody in HFT is hiring,” said Nicholas Wells, managing director at NewtonChase, a recruiting firm in Singapore. “The race for talent is hot as they expand in Asia where there are new markets and HFTs aren’t in as much of the spotlight as in the West.” The reception to HFT in Asia has been mixed. Japan, where high-speed trades make up about 70% of orders at the Tokyo Stock Exchange, is mulling new rules. Brokers in India, the developing world’s biggest electronic-trading market, have asked the regulator to reconsider plans to slow down computer trading.
China, the world’s second-largest economy, cracked down on algorithmic traders in the aftermath of last year’s market rout. Meanwhile, several electronic traders have set up shop in Singapore, which started as a trading port and where HFT is viewed positively.
“Trading is a part of Singapore’s DNA and a natural base for participation across Asian markets,” said Kevin Pereira, managing director for Asia Pacific operations at Jump, which opened an office in the city-state in 2011.
Asian exchanges have ramped up speeds to levels conducive for automated trading, said Greg Griffin, head quant at Eclipse. The Hong Kong-based firm, started by three former Optiver traders in 2007, is looking to add 20 employees to its current 100, he said.
“Competitors are definitely coming,” said Griffin, a former head of Asian automated market making at Morgan Stanley. “Everything is moving so quickly in our space, if you don’t invest for the future, there’s no way we can keep up.”
HFT recruitment in Asia is a blessing for would-be traders who might otherwise be looking at a tough job market. Barclays shut its securities operations across Asia earlier this year, while Macquarie’s equity trading unit has been reduced. Morgan Stanley cut fixed-income jobs and CLSA asked its staff to take unpaid leave to save costs. The pullbacks have come amid a drop in trading jobs as the industry becomes more automated.
“In the good days when banks hired for trading desks, they would look at filling 50 or more,” said Will Tan, managing director at Principle Partners, an executive search firm in Singapore. “These days, you’re lucky to have a job there and not be replaced by a machine.”
When the big firms add to their electronic desks these days they’re mainly hiring for their risk and compliance functions, said Wells of NewtonChase.
The banks have seen a rebound, with the five biggest US investment banks reaping $20.7bn in revenue from bond and stock trading in the third quarter, the most for the period since 2009. But they did it with fewer traders and sales people, according to data compiled by Bloomberg.
Automated trading firms say they’re better insulated from the swings faced by other financial companies. “As a market maker, we’re indifferent to markets going up or down,” said Fieke Korporaal, a Singapore-based spokeswoman at Flow Traders BV. Grasshopper has more than 50 employees and is planning to increase that by 20% in the next 18 months, said founder John Lin. He’s looking for mainly tech and quantitative roles because only the “fittest, fastest or scrappiest survive.”
High-speed firms don’t usually tout new hires in a cut- throat industry where trading strategies are fiercely guarded, said Lin, 47, a former pit trader. Campus recruiting is the bulk of hiring and usually little or no experience in finance is required, said Principle Partners’ Tan.
Virtu has four jobs available in its Singapore office. DRW has six open job postings for its newest office, in Singapore, which opened in March 2015 and has 30 employees. The firm recently hired Tower Research Capital LLC’s Brook Teeter to run its business in Asia. Jump has 11 open positions for its Singapore office, according to its website. The firm has over 40 employees in the Asian city, Pereira said.
“It’s nice to hear that these guys are hiring and growing,” said Rehan Sondh, a 22-year-old masters in financial engineering student, who was one of about 100 students to attend the DRW event. “That’s a refreshing change from the doom and gloom news at the big banks.”
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