A week ago, UK-based banking and finance recruiter Morgan McKinley released a survey with the headline: ôSingapore and Hong Kong financial services professionals satisfied with bonus as majority receive similar or higher payoutsö. In March the firm conducted a survey of 481 financial services professionals working across the front, middle and back offices within investment banks and financial services institutions in Singapore and Hong Kong (respondents included 279 individuals working in Singapore and 202 working in Hong Kong). The majority of respondents said they received a similar or higher bonus in the 2007 round than the previous year and were satisfied with their payouts, according to Morgan McKinley.
Now one way to view this is that those who didnÆt receive higher bonuses, didnÆt answer the call to the survey. But still û the breakdowns are interesting. In Singapore, 87% of respondents received a similar (48%) or higher (39%) bonus than the previous year and 76% reported they were satisfied with the bonus they received. In Hong Kong, 89% said they received a similar (51%) or higher (38%) bonus than the year before and 73% claimed they were satisfied with their latest bonus payout. In both Singapore and Hong Kong, 75% of those surveyed stated their bonus either matched or exceeded their expectations.
ôWhilst the Asian market has not fully escaped the impact of the US subprime collapse and the ensuing volatility of the worldÆs financial markets, these findings show that compared to the previous year, the majority of financial services employees still received a similar or higher bonus,ö says Jeremy Canning, country head, Morgan McKinley.
Of course, the test will be the 2008 bonus round. But yet another survey suggests business sentiment isnÆt all that dire û so there could be banking business to come.
Yesterday CLSA released the results of its Asian Business Pulse survey of 425 Asian corporations in 11 markets (including Japan). It found that for 62% of businesses volume growth in the first quarter of 2008 was stronger than 2007 and nearly half (47%) of companies reported stronger export volume growth.
While 42% of respondents described business conditions as better in 2008 than a year ago, a third (32%) said they were tougher.
CLSA Head of thematic research, Amar Gill, says the generally optimistic outlook of Asian businesses provides tentative signs of economic decoupling despite high financial-markets correlation.
ôThe markets are correcting, but what we are seeing is a slower knock-on effect in Asia to the credit crisis in the US. Demand from the growing middle-class, as well as rising incomes for those already in the middle-class and continued investment in infrastructure is sustaining domestic demand even if there is some slowdown in trade with the developed economies,ö Gill says.
ôThe need to contain domestic cost pressures appears to be a far greater preoccupation for companies than the expected weakening in the global appetite for Asian goods. The key concern that emerges is margin compression in a number of sectors.ö
In terms of capital expenditure, only 52% of companies indicated they would increase spending. According to Gill this is low given the higher material and equipment costs; 61% of companies indicated input costs had risen in the first quarter of this year, while only 53% of respondents were able to raise average selling prices. ôThe squeeze in margin and caution over the medium-term growth outlook could explain the reluctance to commit to higher capital expenditure,ö he says.
Companies in power and gas, autos and materials were planning higher capital expenditure while those in petrochemicals, infrastructure and transport indicated they would cut capex. Japan, Hong Kong and Taiwan have proportionately more companies indicating tougher business conditions and also more indicating a margin squeeze, while Thailand, Indonesia and the Philippines appear proportionately less affected by margins, continue to increase capex and are positive on business conditions.
Two thirds (67%) of companies reported increases in total overheads for the first quarter this year, 87% of companies indicated salaries would rise in 2008, yet a similar number expected to increase headcount at or above last yearÆs rate. Faster headcount growth is expected in China, Hong Kong, Indonesia and India while far fewer companies in Korea, Japan and Singapore expect to increase staff numbers.
But again, one has to wonder if the people who chose to answer the survey were the ones who were in a more positive frame of mind. CLSA sent out 1,000 questionnaires, receiving a 34.4% overall response rate from companies under coverage. Proportionately, the highest response rates (>50%) came from the Philippines, Taiwan and Korea. The lowest response rates were from companies in Malaysia, Singapore and Japan (30%), which as CLSA notes this possibly indicates tougher conditions in those sectors/countries and hence less inclination to respond. As for further breakdowns: 56% of the sample were from Taiwan, South Korea, China and India; technology and consumer companies in the region constituted 39% of the survey with a wide spread of other sectors making up the rest.
¬ Haymarket Media Limited. All rights reserved.
