Hong Kong’s gold trading ambitions tested by talent shortage

[SINGAPORE] Bank of China (Hong Kong) posted a job ad early this year for a precious metals trader fluent in English and Mandarin with at least five years of experience to work on its gold desk in the city.

Eight months on, the state-owned Chinese lender is still trying to fill the position, a sign of how a shortage of metals trading talent in Hong Kong is posing an early test for Beijing’s plan to turn it into a global gold hub.

China, the world’s top supplier and buyer of bullion, wants more influence over how it’s priced. As part of those efforts, the Shanghai Gold Exchange rolled out two new contracts tailored to global investors and a bullion vault in Hong Kong in June. John Lee, the city’s chief executive, has also said that he wants to revive its status as a gold-trading centre.

“Precious metal hiring in Hong Kong is heating up,” said Hayley Law, an associate partner at recruiter Page Executive. However, the lack of locals with the right skills means “we need to source candidates from Singapore, London, mainland China, and even Dubai”, she said.

The state lenders are looking for bilingual staff who have also, preferably, done stints in global banks. They are especially focused on physical traders, who are familiar with the nuts and bolts of procuring and moving gold bars, rather than just clicking orders on a screen.

Those skills are rare in Hong Kong, and, when they do occur, the city’s mostly Cantonese-speaking bullion dealers often do not meet Chinese lenders’ criteria. When looking to hire from abroad, the banks struggle to match the salary and relocation packages offered by their international rivals. The difference in working cultures is another hurdle, with traders at state-owned Chinese lenders expected to spend a lot of time cultivating and maintaining relationships within the bank.

Chinese rules on overseas postings also complicate matters. For mainland staff, assignments in Hong Kong are capped to six years, with a two-year “freeze period” after returning when they cannot resign, according to a report in Caixin magazine. Should they quit within three years, they must repay some overseas allowances and subsidies.

The Hong Kong gold industry has managed to attract some offshore talent, however. Bank of China (Hong Kong) recently poached Yibin Shen, formerly at ICBC Standard Bank in Singapore, sources familiar with the matter said. The lender is still trying to hire several more precious metals traders, according to a recruiter who asked not to be named as discussing confidential matters.

Bank of China did not immediately respond to a request for comment.

The talent crunch means there’s also an intense rivalry for staff between banks in the city. ICBC (Asia), the Hong Kong subsidiary of Industrial and Commercial Bank of China, hired trader Paul Cheung from China Merchants Bank and is trying to further expand its small bullion team.

The growing interest in gold traders in Hong Kong comes after a spectacular rally that’s seen the precious metal almost double in value over the past two years due to an increasingly volatile trade and geopolitical environment. Trading houses and family offices around the world are jostling for a piece of the investment pie that has traditionally been dominated by big banks with access to low-cost financing. Trafigura Group recently hired a team of bullion traders.

Private sector interest

Hong Kong’s ambitions are also attracting interest from private companies. Precious metals trader MKS PAMP said this month that it would set up its Asia-Pacific headquarters in the city. The Swiss company may also build a gold refinery in the Greater Bay Area, which encompasses nearby Shenzhen and Guangzhou.  

Authorities in Hong Kong are pressing ahead with their gold-hub ambitions, and have set up a committee to map out plans to expand the sector. Detailed measures, including supporting physical deliveries, are set to be announced by the end of the year.

That will expand Hong Kong’s rivalry with fellow Asian financial hub Singapore, where the BlackRock-backed Abaxx Exchange recently began offering a US dollar-denominated gold contract. But Hong Kong will need to attract more precious metals traders, some of which may have to come from Singapore, to achieve its goals.

It might be tough for the Chinese banks to attract top international talent, but they should be able to get mid-tier people, said Joshua Rotbart, founder and managing director of gold dealer J Rotbart & Co. “I am not sure yet, there’s a big growth in the precious business in Hong Kong. We need to see again by the end of this year.” BLOOMBERG