Claire Wang
Rice University
Houston (29.7° N, 95.3° W)

featuring Naoki Shiba, Credit Trader, Barclays, Tokyo (35.6° N, 139.6° E)

Naoki Shiba is a credit trader at Barclays in Tokyo. He graduated from Rice University in 2017 with a degree in chemical and biomolecular engineering and a minor in computational and applied mathematics.

I had the pleasure of interviewing Naoki, who is based in Tokyo, while I was across the world in Charleston. In the interview, we talked about his decision to pursue trading at Barclays. Although Naoki majored in engineering, he was ultimately drawn to the fast-paced culture of trading at an investment bank, in contrast with the long paperwork and approval processes he experienced as an intern at an engineering firm. While the engineering-specific knowledge did not transfer over to trading, Naoki still applies the same analysis and problem-solving skill set from his engineering background to his current role.

As a credit trader at a global firm, Naoki trades corporate bonds, interacting with clients all over Asia, ranging from central banks to asset management companies, life insurance companies, and retail clients. In his position, quantitative and communication skills are a must, whether it’s calculating and analyzing risks associated with a certain bond on the spot and making quick decisions given news and market movements, or speaking with sales around the world in Tokyo, Hong Kong, Korea, New York, and London.

For Naoki, who is bilingual in English and Japanese and grew up in both Europe and the United States, Barclays Japan was a great fit for his background. I think that an important takeaway from the interview is to explore opportunities abroad, especially for students who, like Naoki, have a cultural advantage and language fluency: it may lead to a more fulfilling career, to be that cultural bridge between one country and another.

Another important point that Naoki mentioned was the influence of technology on the financial industry. As technology continues to increase efficiency and ability, there is a gradual shift toward data science and algorithmic trading. And it comes as no surprise that financial institutions like Barclays are increasingly interested in recruiting individuals with tech and data science backgrounds, who are capable of developing and understanding new technology. I think this is a reminder to students that it’s important to reach out to professionals in their field of interest early for advice and to gain applicable skills to stay ahead of the curve.

Highlights from the interview

How did you come into working at Barclays in Tokyo?

I’m originally Japanese, but I grew up both in the US and in Europe due to my dad’s job. I always had international experiences so working at an international company in Japan was a pretty good fit for my skills and my background. The fact that I can speak both Japanese and English helps connect Japan with the rest of the world. So, being that cultural bridge was also something that drew me to Barclays Japan as well.

When did you first envision yourself as a credit trader/analyst?

Originally I was an engineering major in college. I studied chemical and biomedical engineering. I did an internship in my junior year in an engineering firm. Although it was pretty interesting, with engineering there is paperwork, a process that is fairly long, to do some real analytical work. There’s a lot of approvals that you have to get, budget approvals, legal approvals, whereas in an investment bank, things go fairly quickly. Especially on the market side. You can make decisions. I liked that fast-paced culture of working in an investment bank and on the market side. So that’s what primarily what drew me to trading and being on the market side.

Did you have a mentor or someone who helped cultivate your interests in that?

Actually, I didn’t. I just applied. I didn’t have any connections to the company. When I was in my junior year, I had a few friends, seniors, that were going into investment banks into some roles, and I could hear their experiences with interviewing with people or their experiences with internships. So I got a more clear sense of what the job might be like, and I thought it might be a good fit for me.

What exactly does your position entail? Could you walk me through a day?

As a credit trader, we trade corporate bonds. So, companies need to raise money, and they can do that through equity—so that’s like your stock market, all your company stocks. Or they can get these loans. They can loan investors a certain amount of money, pay them a certain coupon. That’s what a bond is. And I can trade those. I can buy and sell those, and by buying at a low price and selling at a higher price I can generate revenues for the firm. That’s what I do as a trader, but I get to interact with a lot of clients that are obviously investing in these companies, central banks. Because I’m based in Asia I primarily focus on Asian banks. But we also focus on other, smaller clients as well, so like asset management companies, life insurance companies, as well as personal banks, retail clients as well. You get to speak to a lot of people. Even though I’m based in Japan, I’m not just trading with Japanese clients or interacting with Japanese clients. Barclays is a global firm, so there’s a lot of connections to Hong Kong, Korea, and other countries in Asia as well.

Are you mostly at a trading desk all day or do you usually go meet with clients?

I work first to see what’s going on in the news. I guess with the China and Japan trade wars right now, the market’s pretty volatile—and so, first, catching up with the daily news, seeing how the market’s moving. And after that, it’s a lot of knowing what clients will want to do given the headlines or the news that comes out overnight or during the day. If there’s a very negative headline, a lot of clients are going to want to sell their bonds, sell their investments. So I’ve got to make sure I’m trying to help those clients and buy those investments off of them but also in a profitable way so I know I can sell those investments or bonds at a higher price later. So that’s what we do…make sure we’re updating clients on a regular basis on how the market’s moving or certain profitable investments that they can start looking at…so that’s sort of what I do on a day-to-day.

What skills do you find yourself using the most in your position?

Obviously, quantitative skills are pretty important. I analyze how risky a certain bond might be. I’m not sure if you’re familiar with a lot of finance, but a lot of it is basic net present value discounting type calculations, but just being able to quickly calculate things in your head is important. Because if a client wants to sell an investment, you only have like, maybe max 10 minutes, if you want to price it or not. So just being able to be comfortable with numbers is definitely something that’s valuable.

Another thing is communication skills. Given that the markets move globally, being able to speak with sales in Tokyo, as well as in Hong Kong ,as well as in Korea, in New York, in London—those are the main financial centers—is pretty important as well.

Then the last one is sort of where you get information. Being attentive and getting that information. In terms of markets, anything can move the market, so a small little detail can be an explanation for something really big that’s going on, whether in the foreign exchange market or in the rates market. If you have that information, then you have that competitive advantage, but if you don’t have that information, then it can work against you because you don’t know why something’s moving the way it is. So just being attentive, making sure you’re reading the news. But also a lot of the relationships you make with other people in other countries are very helpful because then you know what those clients are doing at all times. That gives you a lot of information on why the market is moving the way it is.

You come from an engineering background. Do you use anything from your major in your current position?

I do not. That’s the quickest answer. But I think, with engineering, it’s breaking down problems and coming up with solutions analytically. That sort of skill definitely I use.

What made you choose Barclays in particular? Was it the culture? What makes it stand out as a good place to work?

In terms of investment banks, in terms of culture, there’s the US banks—the Goldman Sachs, J.P. Morgan, those types of banks—and then you have your European banks—so Deutsche Bank, Credit Suisse, Barclays—and definitely when you interview with them or you interact with people from those firms, there’s definitely a different culture. In the US, it is very aggressive. It’s let’s get things done in the quickest, most efficient way as possible, whereas in the European culture, it’s a little more relaxed. I mean, people are fairly Type A personalities, as you would expect in an investment bank. It’s a little more relaxed. They’re not as strict about certain rules, so it gives you a little more freedom to speak up. Even though I’m currently in my second year, which is still a junior in an investment bank, being able to speak up to people that have worked at the firm for 10-20 years is more possible in a European bank just given the more relaxed, flatter culture that they have.

Where do you see yourself in 5 or 10 years?

With a trader it’s hard to say. Like in consulting, you start as a consultant, then become an associate, become a partner, and there’s a clear career path in that sense, in terms of how you’ll get promoted. Whereas with a trader, it’s more about how much risk you can take. Currently, I’m pretty limited in terms of how much risk I can take and how much investments I can buy off of clients or sell to clients. As I progress, I want to expand those risk limits, so being able to trade with bigger clients on a more frequent basis is definitely something that I’m looking forward to in the next five years. In terms of the role itself, it’s pretty much the same thing, but it’s more about how much the company’s willing to trust you with your risk-taking.

How would you say science and technology shape the work that you do?

In the very beginning, in terms of looking at financial markets, everything was done with paper and pen. You buy an investment off a client, you record it with paper and pen, and then you send it out. Now it’s…everything’s all digital. Everything, even the inquiries we get from clients are sometimes just sent electronically. So, in that sense, technology has definitely impacted our business in terms of making things more efficient for both clients and for us in terms of seeing different inquiries, booking different inquiries. But, also, in terms of the data science move, there’s a lot of more algorithmic trading. In the past, the process has been—client comes to Barclays, says they want to invest in something or they want to sell an investment in something, then we would look at it manually, analyze it manually, whereas now some of it is done with algorithms. So when a client wants to sell an investment, an algorithm will shoot out a price to them. So, in that sense, a lot more technology savvy data scientists are actually wanted, whereas in the past it was more like all majors are welcome. But currently there’s a huge focus on hiring people who are capable…developing and understanding new technology.

What advice would you give a student interested in credit trading?

I think there’s a huge focus, especially at Rice, at least when I was there, to take as many classes and get the highest GPA as you can…I should have been more proactive in all the extracurriculars where you develop communications skills. So being able to communicate with your peers, and actually accomplishing things through your clubs, is more important than sort of only studying and getting the highest grade on your exam or midterm or whatever. I guess that doesn’t apply just to credit trading, but I guess it’s advice that I would have for any future graduate.

Interview excerpts have been lightly edited for clarity and readability and approved by the interviewee.