[HONG KONG] Citigroup plans to increase headcount in its Asia rates and prime businesses by 5 to 10 per cent over the next year to cope with booming demand from customers including hedge funds, according to the bank’s regional markets chief.
“Client activity in the Hong Kong market has been buoyant,” said Paul Smith, head of markets for Japan, Asia North and Australia, citing especially strong growth in prime and rates divisions.
The bank’s prime hedge fund clients in Asia have doubled in two years as initial public offering flows into Hong Kong and China bounce back, he said.
Hong Kong’s benchmark Hang Seng Index is up almost 50 per cent over the past year with the bourse hosting three of the four biggest stock offerings in the world in 2025.
“There is a real sentiment shift,” Smith added, pointing to heavy inflows from US hedge funds and growing demand from quantitative funds seeking access to less-liquid A-shares in China.
“The big theme this year has been about the ability to provide A-shares to quant funds, particularly A-shares that are outside the top 100 names which are less liquid,” said Smith. “Our robust, stable inventory is proving invaluable in securing mandates from prominent US-based quant funds.”
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Client flows into Hong Kong and China rose about 30 per cent in the first half of 2025. Citigroup has also ramped up investor visits to China’s second- and third-tier cities.
With equity revenue concentrated in Hong Kong, some staff are returning to the city post-Covid-19. Robert Stewart, the firm’s head of Asia-Pacific equity trading, relocated this year from Singapore. The bank’s Hong Kong markets business employs several hundred people, with about 75 per cent in equities.
Smith relocated from London to Hong Kong about 18 months ago to take on his current role after the Wall Street bank went through a sweeping reorganisation.
Citigroup’s traders posted their best second quarter in five years, with fixed-income revenue jumping 20 per cent to US$4.3 billion and equities sales and trading revenue reaching US$1.6 billion. BLOOMBERG
