April 2000
Credit research poll 2000: The kings of credit research in Europe
Euromoney polled 80 big investors on which firms they rated for credit analysis, and for which sector. The poll showed that credit investors rely extensively on banks' research. They want high quality, timely and independent analysis and access to the analysts. Euromoney's poll shows which firms investors rank highest across various sectors
They were undervalued, underpaid and covered an illiquid market. Credit analysts in Europe used to feel inferior to their glamorous cousins in equities and US bonds. Now they're big enough to be taken seriously. See our poll on who investors think are best sector by sector. Michael Peterson reports, research by Andrew Newby
Credit research is harder to do well in Europe than in the US. That's not just because of the number of languages and legal jurisdictions in Europe, it's also because credit is a novel concept for many investors. "This is a brand new business in Europe," says Varki Chacko, European head of credit research at Goldman Sachs in London. "There are a lot of demands on sell-side analysts both in terms of analyzing credits which have never been analyzed before and in reaching out to clients who are new to the credit markets. What could be done in 30 minutes in the US often takes an hour and a half in Europe."
But European investors are rapidly learning the language of credit. Many piled out of government bonds into the higher yields of corporate debt following the launch of Europe's single currency. A few then got their Fingers burnt in late 1999 when the price of some corporate bonds took a sudden tumble.
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