Morgan Stanley has committed itself to global sector analysis. By encouraging information flow between analysts working on a particular sector, wherever that sector is located geographically, the bank finds it much easier to isolate product or service trends within industries that would give companies a competitive edge. It is a successful method of identifying hidden value.
The resulting comparison of companies worldwide gives Morgan Stanley an edge over the competition by providing a solid global research framework. It also provides an incentive to its analysts to talk to each other. Indeed, the bank has a policy of regularly bringing team leaders together to come up with new products.
Another element of the bank’s approach to research is its emphasis on product management, another area where communication is of central importance. The bank tries to ensure that reports written by its analysts focus on the right research at the right time, the idea being that reliable research leads to a higher opinion of the bank and so more business.
Apart from its emphasis on global perspectives and distribution, Morgan Stanley has invested time and money in creating a new global database for its investors and is increasing the size of its analyst teams, but by training its junior analysts rather than making a large number of new appointments.
The bank firmly believes that sector coverage gives a better bottom-up view of companies, but hopes to expand by adding more and more countries to its analysis over the next few months.
Top tier UBS UBS is by no means the largest international equity research house, but it is making a lot of the right noises. It has expanded the number of its analysts and the locations covered. Its emphasis on technology puts it in a good position to enjoy strong growth in the coming year.
Top tier Merrill Lynch Among US-based firms, Merrill Lynch has the largest and broadest research coverage with a staff of over 650 professionals in 27 countries around the world. Its 450 global equity analysts cover in excess of 3,500 companies located in more than 50 countries.
