Asian Brokers: The old hands fight back
The competition in Asia from US investment banks has led to new approaches and ideas in equity research. But the old problems remain. Corporate sensitivity makes most analysts reluctant to stick their necks out. And the increased competition has led to star analysts moving to whichever firm will pay them most. Robert Minto reports.
Two firms emerge as success stories from Euromoney and Global Investor's eighth annual survey of institutional fund managers' opinions of Asian equity research: Jardine Fleming and Merrill Lynch. Their achievements underline the changing structure of the Asian market. Jardine Fleming, a force in Asia for years, has managed to keep ahead of the pack. Merrill Lynch, a new player in the market, has made inroads into the European hegemony and ranks third overall. Competition is tougher than ever, and banks know they must evolve to retain their position.
ING Barings, which slipped to third in last year's poll, this year ranks behind Merrill Lynch, while Crédit Lyonnais stays in second place.
ING Barings and Jardine Fleming are both making fundamental changes to their research. Both firms realize that reputation and past dominance count for little in a rapidly expanding market. Angus Baxter, head of equity markets Asia at ING Barings, says: "Asia is a very competitive market. Two to three years ago it was only us and Jardine Fleming.