PeakVibe

Asia's financial industry will suffer extensive job losses in the coming months, as the impact of the regional crisis forces firms to reduce overheads, Peregrine Investments Holdings chairman Philip Tose says.

The Hong Kong-based investment bank undertook its own radical clear-out last week, sacking 275 staff in one of biggest cut-backs that the SAR's banking and broking industry has seen.

'There will be massive lay-offs across the region. You've begun to see that . . . Every company exposed to Asia markets will cut [staff],' Mr Tose said.

The chairman could not guarantee that Peregrine would retain all of its remaining 1,725 employees, because of continued market uncertainty.

'No one knows what will happen . . . We hope we have done enough. We think we have done enough. But I've never seen anything like it,' he said.

'The loss of value in Asian markets in the past six months is quite incredible. It's unprecedented.' The possibility of further reductions at Peregrine appears to run counter to company officials' comments last week.

Mr Tose said conditions across most Asian markets would deteriorate next year, further tightening liquidity.

Asia's equity markets dominate the world's worst performers, as currencies have tumbled and serious macro-economic problems have come to the fore.

'We are an investment bank that requires funding, credit lines to do our business. What we began to see in September and more so in October was a drying up of liquidity in Asia. This will worsen next year,' he said.

Mr Tose said the fall-off in funds, not the impact of trading losses as equity markets imploded and regional currencies dived, was what drove Peregrine's recent proposed US$200 million tie-up with Swiss-based financial and insurance firm Zurich Group.

'The Zurich deal helps us to bolster our shareholders' funds and gives us flexibility and breathing space for reorganising our businesses,' Mr Tose said.

'This [retrenchment] was done not out of a need to survive huge losses but because of liquidity constraints within Asia. There's a lot of people in that same boat.' The trading losses, which Peregrine admitted in newspaper advertisements in October after rumours of the firm's possible failure swept the market, were 'not that significant', he said, adding that full-year figures would be in the black.

Results for the first 10 months are to be announced after the market closes next Thursday.

'The universe of the investor [in Asia] is substantially reduced, and the net knock-on effect is that the resources against those markets must be realigned,' Mr Tose said.

After the cuts, Peregrine was left with a greater focus on Hong Kong and on other China markets. The firm's Bangladesh office was shut, while staffing at other centres was pared back.

'Hong Kong and China are our home markets. Naturally, we will retain a commitment to Asia, but that will be reduced. If total revenue to a company is reduced, any prudent businessman must act,' Mr Tose said.

Peregrine shares closed 10 cents lower yesterday at $7.20, taking their loss this week to 5.27 per cent compared with the Hang Seng Index's rise of 6.55 per cent.

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