Increasing demand of Chinese credit analysts

Dec 16, 2015, 09:00 am

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Source from AP, Yonhap News

By AsiaToday reporter Goh Jin-ah - Demand for credit analysts is rapidly growing following a series of defaulted companies in China's bond market.

Bloomberg reported on Monday that at least seven companies defaulted in 2015, up from only one in the years since the onshore bond market started in 1981. The most recent default was by Sichuan Shengda Group. Ordos City Huayan Investment Group has flagged a possible delinquency this week.

Along with the increase in bond default, the importance of credit analysis is being emphasized leading to increasing demand of credit analysts. Monica Song, associate director at Shanghai-based global human resource company Hudson Global, said, "We haven't seen so much demand for credit analysts before. Brokerages' asset management departments, mutual funds and insurance companies are the biggest recruiters."

As demand is increasing, payment is increasing as well. Shanghai-based HFT Investment Management, which oversees 68.6 billion yuan (KRW 12.37 trillion) of fixed-income assets, said in an interview with Bloomberg on Dec. 8 that it will expand its credit analyst team by as much as 50 percent in three years and such specialists' pay will likely increase.

When trying to scout talent from other companies, some investment companies offer to pay more than 20% of their previous salary. For current credit analysts at asset management firms, pay increases is expected be more than the average for all the staff.

Such demand is mainly due to the credit rating agency, who hasn't been working as properly as it should be while credit risk has been increasing in the bond market.

For example, China Chengxin International Credit Rating didn't cut China Shanshui Cement Group's score to a level considered junk until just two days before the cement maker warned on Nov. 5 of a possible default. There will be stronger demand for onshore credit analysts as the market matures and global investors are allowed into the third-biggest bond market.

Premier Li Keqiang has pledged to eliminate zombie companies and close manufacturers with overcapacity regardless of slow economic growth.

However, it seems not easy to find the right talent. China's bond market is "competitive industry," said HFT's Shao. "China is short of excellent credit analysts. There are not many people who have their own views and a deep understanding of Chinese companies. We are recruiting people, but it will take time."

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