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Big Apple or The Smoke? Does New York or London offer the best career opportunities for the ambitious finance professional?

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Adrian_kinnersley

If you’d listened to the doom-mongers over the past few years you could have been forgiven for thinking that the glory days of both Wall Street and the City of London had come to an end. Headlines in the UK seemed to positively revel in the shrinking headcounts of the Square Mile and in the US major business schools quietly pointed their best graduates towards apparently safer sectors and away from their traditional destinations in the banking world.

Adrian_kinnersley

Adrian_kinnersley

Yet, despite all the predictions, financial services has stubbornly refused to roll over and die and a wide range of institutions in both London and New York are still attracting and retaining large numbers of highly ambitious professionals. But in an age where the brightest and best are increasingly internationally mobile, which side of the pond can offer the very best career opportunities?

Despite the ongoing resilience of the City, there is no doubt that its financial services landscape has changed significantly since 2008 and looks set to change even further over the next few years. Europe’s politicians are no longer as cosy with the banks as they were before the collapse of Lehman Brothers and the end of their love affair with the sector, like so many other big break-ups, has been marked by a painful and sustained level of acrimony. How far the resultant move towards caps on bonuses, transaction taxes and even criminal responsibility will go is still anyone’s guess, but it doesn’t take a crystal ball to forecast that the mid to long term result is likely be a drift of activity – and consequently jobs – to more amenable jurisdictions around the globe.

However that doesn’t mean that the game is up for London by any means. After all, this is a city which has maintained its position as a world leader by adapting to developments – and crises – since a time when New York was still owned by the Native Americans.

On the issue of pay, for example, firms have responded to the pressure on bonuses by finding other ways to reward their star players – in most cases by simply raising basic salaries. Tightening regulation has actually created a whole new market for compliance professionals. And the focus on controlling the activities of the big banks seems to have stimulated the sector’s entrepreneurial spirit prompting the rise of small, specialist finance houses, eager to attract talent from more established, but less flexible, competitors.

London also continues to dominate other key parts of the financial services sector. The insurance market, for example, is experiencing something of a boom due to the growth of emerging markets business and the need to develop ever-more effective technology to service this work means there is ongoing demand for specialist IT professionals. And outside London itself, in the south-east of the UK, we are seeing growth in the energy trading arena and a consequently healthy employment market for those seeking more work/life balance outside the capital.

The effect of the great financial crisis was, if anything, felt even more severely in the US than in the UK. While Northern Rock’s demise might have shaken the nation’s confidence, the impact of seeing employees of one of America’s most high profile investment banks standing stunned and bewildered on Wall Street pavements is hard to underestimate. But the US was relatively quick to recover from the upheaval and we’re now seeing New York gearing up to exploit the regulatory, taxation and political challenges their European rivals are facing. As a result we’re seeing significant investment in the upgrading of technology and the heightened demand for the right professionals that naturally goes with this.

The employment market in New York has also been sustained by firms retrenching deal decision making to their Manhattan headquarters and by a general unwillingness to offshore other activities overseas. Instead they have largely opted for near-shoring to less expensive locations in the USA – a decision which has allowed them to begin moving key staff back to NYC as conditions improve. And the buy-side market is particularly strong in New York with the city now host to a hedge fund community that rivals in size,  if not actually exceeds,  its London counterpart.

So for a broad spectrum of financial services professionals the future is looking relatively rosy as we move through the second half of 2013. However, while London has recovered well from the great crash of 2008 and the employment market is extremely healthy, I can’t help but feeling that New York currently has the edge when it comes to the best career opportunities. Yes, NYC has its own concerns, namely the growing power of Hong Kong as a global financial sector with a long reach to the US’ West Coast. But until European governments and the European Commission establish clarity about the future of financial services on the continent, the City will continue to face a potential brain-drain of jobs and talent to New York and beyond.

Adrian Kinnersley is Managing Director of Twenty Recruitment which has offices in London and New York

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Luxury cars, EVs to fuel Hyundai’s China, U.S. sales in 2021; Q4 profit jumps

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Luxury cars, EVs to fuel Hyundai's China, U.S. sales in 2021; Q4 profit jumps 1

By Heekyong Yang and Joyce Lee

SEOUL (Reuters) – Hyundai Motor Co said on Tuesday it expects sales in United States and China to surge this year, driven by the launch of new electric cars and sports utility vehicles (SUVs), after reporting its best quarterly profit in over three years.

Hyundai’s holiday-quarter profit jumped 57% on more demand for premium-margin SUVs, but overall sales volumes fell 5% amid a broader economic weakness due to the COVID-19 pandemic.

The promising outlook is a testament to Hyundai’s big electric vehicle (EV) push. The company, which together with affiliate Kia Corp is among the world’s top 10 automakers, is soon expected to introduce an EV-only platform that will use its own battery technology to cut time and costs.

Hyundai, however, did not provide on its earnings call any update on recently reported talks between it and Apple Inc about an electric car and battery tie-up.

On sales, the automaker said it expects a 12% jump in its biggest market, North America, in 2021. Its sales in the fourth quarter ended December slipped 2% in the region.

“With our lineup with new models ready to launch in the United States, we aim to increase our market share to 4.8% this year,” Senior Vice President Koo Za-yong said on the call.

Last year, the company managed to slightly advance its U.S. market share to 4.4%, helped by sales of the Palisade SUV and Kona EV, he said, despite a 10% fall in sales.

Analysts expect a boost to Hyundai’s EV sales this year despite a global recall of Kona Electric due to fires.

Hyundai said it expects sales to jump 28% in China, the world’s top car market where it also plans to release the electric version of its Mistra sedan this year.

“Last year, Hyundai basically didn’t do much in China, while other automakers launched new models as the Chinese auto market saw a rapid recovery amid the pandemic … Hyundai’s China strategy seems to focus on electric cars,” said Lee Han-joon, an analyst at KTB Investment & Securities.

Hyundai expects to sell 562,000 vehicles in China in 2021, and estimates sales in North America will jump to 909,000.

BEST QUARTER SINCE 2017

In the fourth quarter, Hyundai earned 1.3 trillion won ($1.18 billion), the highest since at least early 2017.

But it fell short of an average analyst estimate of 1.5 trillion won, compiled by Refinitiv, due to a strong won.

The South Korean currency rose about 7% against the dollar in the three months to December. A stronger won erodes the value of overseas sales for South Korean companies.

Hyundai shares, up more than a third this month led by news of the Apple tie-up, fell about 3% on Tuesday.

The broader KOSPI was down 2%.

Hyundai’s quarterly revenue rose 5% to 29.2 trillion won as it saw solid demand for its cars in the United States and emerging markets such as India despite the pandemic.

While demand for its vehicles from car-rental companies that purchase in bulk is still tepid, analysts said, sales of its luxury cars are expected to remain a bright spot.

Hyundai had delivered a loss in the October quarter as it provisioned for a big engine-quality related bill.

“Hyundai had a good fourth quarter, especially in the United States, where higher average-selling-price cars such as SUVs saw increasing demand as consumers shun public transit because of COVID-19 and low gasoline prices,” KTB’s Lee said.

“Holiday deals helped as well.”

(Reporting by Heekyong Yang and Joyce Lee; Editing by Sayantani Ghosh and Himani Sarkar)

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Who needs to sit next to a trader? Asset managers embrace outsourcing

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Who needs to sit next to a trader? Asset managers embrace outsourcing 2

By Carolyn Cohn

LONDON (Reuters) – More pension funds, insurers and asset managers are outsourcing part or all of their dealing desks to specialist traders as they seek to cut costs and adapt their operations to deal with the coronavirus crisis, industry sources say.

Last year’s volatility in markets, plunging as the pandemic took hold and rebounding as government stimulus kicked in, meant asset managers spent more time juggling trades and less time on their usual job of long-term asset allocation.

Moving some or all of their trading to specialist firms offers access to a larger group of banks and brokers, making it cheaper to execute trades and allowing asset managers to cut trading staff and trading terminal costs, industry sources say.

The shift to outsourcing has also been accelerated by changes in working practices brought about by the pandemic.

“As we all work from home, people are realising you don’t need to be physically sitting next to the traders to be able to communicate,” said Tom Carroll, head of asset management at British fund manager Sanlam Investments, which outsourced trading to Northern Trust shortly before the pandemic.

Carrol said the move meant his company’s 20 fund managers could “focus more on what they’re good at” – picking assets for the long term rather trading through short-term volatility.

Northern Trust global head of integrated trading Gary Paulin said the bank had 65 outsourced trading clients, of which 18 were added in 2020. Half the new clients were long-only asset managers, rather than those involved in short selling or other hedging activity. Two were asset owners such as pension funds.

“Last year was a really, really important turning point for the industry,” he said, adding that asset managers were rethinking how they operated as the type of market volatility seen in 2020 “always exposes a bloated cost base”.

Natixis Investment Managers International’s outsourced trading unit’s turnover rose 18% to 317 billion euros ($384 billion) in 2020 due to the extra volatility.

Investment bank Cowen’s global outsourced trading unit doubled its revenue in 2020, said Jack Seibald, Cowen’s managing director and global co-head of prime brokerage and outsourced trading. He did not disclose revenues from the business.

“The lockdown opened the eyes of so many managers to the idea that outsourced trading can be a credible solution,” he said.

SLOW BURN

Outsourcing back-office functions such as accounting is well-established, but the trend towards outsourcing trading has been a slow burn, industry sources say.

It started around a decade ago as an equities trading service for hedge funds and wealth managers. It expanded after European regulation made running a trading desk more complex https://www.reuters.com/article/us-markets-assetmanagers-insight/asset-managers-farm-out-trading-as-costs-and-complexity-climb-idUSKCN1UV2FE.

Cost savings, operational efficiencies and trading expertise have pushed investors to outsource dealing, industry sources say, adding it increasingly appealed to insurers, asset managers and pension funds.

David Berney, founding partner of Ergo Consultancy, said one European insurer cut the costs of buying or selling a U.S. Treasury bond to “a few” basis points from 25 bps by outsourcing.

Cole Smead, president of Smead Capital Management in Phoenix, Arizona, which switched to outsourced trading with Outset Global in October, said the firm no longer needed to employ a trader in London.

Erik Vynckier, a non-executive director of British insurer Foresters Friendly Society, said outsourcing made sense for firms with less than 500 million euros under management.

“It would be difficult to get a good trader for portfolios this size,” he said.

Trading groups said they typically hired bank or asset management traders, sometimes in a team transfer, offering work to those set adrift by the shift away from in-house operations.

Outsourcing can also cover the analysis, administration and compliance services handled by in-house teams.

Companies offering trading services have expanded from equities into fixed income and other assets.

Outset Global started pre-initial public offering (IPO) trading on secondary markets last year. Northern Trust added European derivatives this year.

Gilles Martins, head of business development at Natixis TradEx Solutions in Paris, said the firm aimed to add further services in 2021. “This year the clients want more.”

(Reporting by Carolyn Cohn; Editing by Edmund Blair)

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As COVID-19 fuels youth unemployment, Nigeria doles out jobs

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As COVID-19 fuels youth unemployment, Nigeria doles out jobs 3

By Adaobi Tricia Nwaubani

ABUJA (Thomson Reuters Foundation) – From hotels and schools to the navy and police force, Nigerian graduate Ene Adejo has looked for a job just about everywhere since she finished her studies eight years ago, but she is still unemployed.

“Sometimes they tell me the course I studied doesn’t relate to the job I’m applying for … Sometimes they tell me I don’t have experience,” Adejo, 34, who studied adult education and business studies, said from her home in the capital, Abuja.

The COVID-19 pandemic has fueled youth unemployment in Africa’s largest economy, which has risen for five consecutive years to about 14%, prompting the government to launch a huge public works scheme to create jobs.

About 750,000 young unemployed people will be offered three-month placements with a monthly salary of 20,000 naira ($51) under the Special Public Works (SPW) programme.

While Adejo is not keen on the low-skilled jobs on offer, such as traffic control and road maintenance, she plans to apply anyway.

“I just don’t like being idle,” she said.

Nearly 14 million young people are out of work in Nigeria, which has one of the world’s largest youth populations, with more than a third of its 200 million people aged 24 or under, according to United Nations’ data.

While such numbers help explain government concern to tackle youth unemployment, critics say the SPW programme fails to address structural problems in the country, where oil wealth has enriched a small elite but failed to create employment.

“It’s a laudable idea but it’s like a drop in the ocean. It isn’t going to solve any problem. It’s just a short-term measure,” said Abiodun Folawewo, a professor of economics at the University of Ibadan in southwestern Nigeria.

Governments should not be providing jobs, he said, rather fostering the right conditions for businesses to thrive, in turn increasing labour demand.

“Once those things are in place, then jobs will be created. It is because those things are lacking that the government is doing this.”

FIGHTING POVERTY

Even proponents of state-led job creation initiatives have expressed scepticism about the SPW, which was launched by President Muhammadu Buhari earlier this month.

Obadiah Mailafia, a former deputy central bank governor who has called for some sort of mass employment scheme, said investment in major infrastructure projects was the key to providing long-term, highly skilled employment.

“I don’t find this particularly inspiring because public works schemes are far more than just casual works placements,” he said.

“Public works systems are about building railways networks, highways, mass housing, and getting lots of youth employed in those projects,” Mailafia, who ran for president against Buhari in a 2019 election, told the Thomson Reuters Foundation.

But Labour Minister of State Festus Keyamo said the jobs scheme was an emergency measure aimed at helping as many people as possible in tandem with longer-term economic stimulus and infrastructure efforts.

“In the now, while government is doing that, how will they survive?” said Keyamo, who is leading the programme.

“While government is creating an enabling environment, the government sees a way to even lift a few people, give a few people something in the immediate. Government’s approach to fighting poverty is multifaceted,” he said.

He added that the government was considering extending the scheme beyond three months, making it an annual affair, or turning it into an agricultural programme.

‘I JUST KEEP APPLYING’

Keyamo said the scheme targets the lowest socioeconomic class with little education, but that will do little to help the millions of well-educated young Nigerians classed as underemployed – working part-time or under-using their skills.

Nigeria’s rate of youth underemployment is 28.6%, according to the Nigerian Bureau of Statistics.

Nancy Otokina, who has a masters in business administration, has worked for less than two years in total since she graduated from university in 2009. Even going back to study for her masters failed to get her a lasting job.

“I thought it would improve my prospects. That was actually my main aim of doing it,” said Otokina, 35, who has a five-year-old son.

She has held off having another child in the hope she can find a job first.

“I just keep applying and applying,” she said.

Besides questioning the short-term focus of the SPW programme, some critics including Mailafia and Folawewo said they feared the government would use it as a means of rewarding supporters of the ruling All Progressives Congress (APC) party.

Keyamo rejected such criticism, saying stringent measures have been put in place to make the selection process transparent and free from political bias.

While Adejo waits to see what will come of her application, she has been helping out with administrative work at her church on a voluntary basis – trying to make ends meet by reselling household goods on social media.

She said she remained hopeful that her job search would bear fruit eventually: “I still expect that I’ll get a good job. My dream is to join the military or the police.”

(Reporting by Adaobi Tricia Nwaubani; Editing by Helen Popper; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

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