Several major Chinese investment banks in Hong Kong including Haitong International and China Merchants Bank International have reduced staffing in their investment and equity capital divisions to cut costs during the city’s IPO drought, according to bankers.

Chinese investment banks expanded their presence in Hong Kong last year in a bet on strong secondary listing demand from US-listed Chinese firms after new cyber security rules instituted by Beijing halted lucrative tech IPOs previously destined for New York.

But the number of public listings in Hong Kong declined sharply in the first quarter of 2022 from a record last year as a result of strict pandemic lockdowns, rising geopolitical tension between the US and China and Beijing’s regulatory onslaught on tech.