Continued expansion in Asia for international investment banks

In spite of the economic turmoil that has been felt worldwide in recent months, investment banks from around the globe are still pushing ahead with plans to expand operations in Asia, namely China and India.

The World Bank recently released their ‘Global Development Finance Report’ which outlined the factors behind the continued economic push in the Asia region.

One of the authors of the report, Hans Timmer, said that whilst the economic development of this area is somewhat slowed, it is still thriving when compared to the rest of the world.

Some of the most well known investment banks are starting to make a presence in Asia, with Goldman Sachs, Morgan Stanley, Deutsche Bank and Credit Suisse all making announcements of plans to bring high level staff to the region.

Richard Campbell-Breeden, European dealmaker for Goldman Sachs, is to be moved to Hong Kong later this year, and will be the co-head for the banks Asian mergers and acquisitions unit.

So far this year, over 15 senior bankers have been recruited or relocated to the bank’s new Asian division.

Global head of media mergers and acquisitions for Morgan Stanley, Scott Matlock, is to be moved from London to Hong Kong and will be taking the newly created seat of chairman of mergers and acquisitions for Asia.

Deutsche Bank’s global head of equity trading, Noreddine Sebti, is also off to Hong Kong from New York.

Credit Suisse has also moved high level employees to Asia, with the global head of financial institutions being transitioned from New York to Hong Kong within the next few months.

In spite of the marginal slow down, most banks are retaining all their staff in the Asia-Pacific region, as well as putting on more from internal and external sources, said Matthew Ginsburg, the Asia-Pacific head of investment banking for Morgan Stanley.

So far the total amount of bankers within the investment industry is staying pretty consistent. However according to the group head of corporate finance for Standard Chartered, Sean Wallace, there is substantial migration of numbers, with many bankers being moved from London and New York to the Asia-Pacific region.

Last week, the World Bank had to officially lower their forecast for world growth in 2008 from 3.3% to 2.8%. Last year’s world growth sat at a very healthy 3.7%, and next year’s growth is expected to bounce back to 3.0%.

The World Bank is forecasting some pretty strong growth rates for developing countries, around 6.5% for 2008. However last year’s growth rate was sitting at around 7.8%. From there the World Bank is predicting the growth rate to slow down a little more, somewhere around 6.4%, which has been suggested is a more sustainable rate of growth.

Analysts from Bloomberg are predicting the Global economic growth rate to slow down from 3.7% last year to 2.7% this year, which has been due largely to energy and food prices dramatically increasing and the aftermath of the subprime credit crisis.

Some analysts have stated that the slight reduction in growth will actually be beneficial to many developing countries, as some were facing the possibility of overheating economies.

Those economies expected to cool off the most are within the Pacific region, Latin America, and China, whose growth is expected to decelerate by 2.5% to 9.2% next year and 9.0% the year after.

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