RMB boon for forex, trading jobs
With concerns about the euro back on the agenda and the US dollar weighed down by an indebted economy, at least there's some good news that can be found in Asia for currency traders, investors and, by extension, employers.
"The RMB is definitely an area of future interest," says Medha Samant, investment director for equities at Fidelity Worldwide Investment. "It is here to stay, and with stock market and currency reforms expected in China, it will be a focus for investors in the year ahead."
For students and recent graduates planning for a career in banking, the blossoming RMB-product market offers an intriguing new route into the industry to explore. Such avenues are especially welcome considering how traditional areas such as investment banking have suffered in recent years.
Fidelity already has an RMB bond fund and with China still registering respectable GDP growth - certainly in comparison with most other countries - there should be every chance for solid, if not spectacular, gains.
Samant adds that Hong Kong has served as a prime example of how a well-managed and regulated market can use its expertise to develop new products and, in the case of the RMB, to "internationalise" a currency. Such development is highly dependent on employers, professional bodies and universities providing the right platform through training, qualifications and practical on-the-job experience.
"Where the Chinese authorities have been running behind regional peers, they have been able to learn something from Hong Kong," Samant says. "Now, with political change out of the way in China, investors and institutions need to think about what is mentioned in the mainland's five-year plan. That will be the focus for future investment opportunities."
Brian Jackson, global foreign exchange strategist at Coutts, expects the Chinese economy to pick up next year as external demand improves. In his view, this will not only make the Chinese authorities more confident that domestic exporters could tolerate a stronger currency, but will also shift the policy focus back to inflation.
"That strengthens the case for modest appreciation of the yuan in 2013," Jackson says. "There is also scope for currencies in the region - including the Singapore dollar and Indian rupee - to strengthen over the medium term."
This points to higher values for the RMB, backed by both government initiatives and the broader global economy. It also suggests the likelihood of new jobs resulting from increased RMB-related investment activity channelled through Hong Kong.
"Diverging growth outlooks suggest outperformance by Asian and commodity-based currencies," Jackson says.