Morgan Stanley’s axing of two managing directors from its Hong Kong leveraged finance team is reflective of a jittery jobs market, say industry experts. Peter Szekely and Ponty Singh, who made the MD grade only last December, are both victims of the bank’s drive to slash its global headcount by 5%. A spokesman for Morgan Stanley says the lay-offs reflect market conditions and the need to cut costs.

It seems Szekely and Singh were in the wrong jobs at the wrong time as leveraged finance recruitment slumps into decline, at least in the short term. “Build mode at the banks has stopped in leverage finance,” says Patrick Flanagan, a partner and leveraged finance specialist at the Hong Kong office of law firm Latham & Watkins. “Things are slower than last year.”

James Knott, head of debt primary markets at Pelham, agrees: “The reality is that not many deals are getting done at the moment, so for a US bank to get rid of two MDs is not so much of a surprise. The current employment market in leveraged finance is a complete contrast to last year when banks were hiring hand over fist.”

He adds that the bulge bracket is not recruiting in leveraged finance “and fewer than a handful of the commercial banks are hiring, and even then only for strategic reasons”.

HSBC is still hiring

HSBC is one bank which is bucking the downward trend, having recently hired Aaron Chow as head of event driven syndication, and David Simons to supervise the merging of its syndicated finance team into the leveraged and acquisition finance division.

One recruiter says HSBC and rivals such as Barclays Capital and Deutsche Bank are still generating work in leveraged finance and commercial lending. “Because hiring is slow overall, they can cherry-pick the best talent.”

She adds that a junior VP at an i-bank in Singapore can expect a salary of between SG$200k and SG$225k.

Job prospects look better in the longer term, especially if China and India open their markets to more offshore lending, says Flanagan.