Emerging market analysts are used to unpredictability. But 2020 has been something else entirely.
As Covid-19 began to spread around the world, forcing countries into lockdown and sending entire workforces home, top brokers observed a sudden increase in demand from investors for research, corporate access — for everything, according to Camille Asmar, HSBC’s head of emerging market equity sales for Europe, the Middle East, and Africa.
“At the beginning, clients wanted access to everything and wanted to know everything,” he said. “We were here to support them and guide them throughout the pandemic and volatile markets.”
For investors in the developing markets of Eastern Europe, Russia, the Middle East, and South Africa, HSBC was particularly well suited to guide them, having long focused primarily on emerging markets. On the research team, for example, every analyst has more than 15 years of experience covering predominantly emerging markets, according to Raj Sinah, head of research for Central and Eastern Europe, the Middle East, Africa and Latin America.
“In emerging markets we are used to volatile moves and waves, so for us as a combined team — sales, research, and corporate access, which have worked together for over a decade — we were used to navigating situations such as this one,” Asmar said. “We were in a position stronger than anyone else to be there for our clients.”
The clients seem to agree: HSBC was among the top-performing firms in Institutional Investor’s Emerging EMEA survey, which asked investors to rate the region’s research purveyors, sales teams, and corporate access providers. The London-based bank was joined in the top rungs by global firms like JPMorgan Chase & Co., Bank of America Corp. and UBS Group.
Background
The 2020 Survey saw the culmination of the acquisition of Extel by Institutional Investor in 2018, bringing together best practices from the two competing surveys of the European equities industry. The most notable change was the adoption of a commission weighted headline result for the II Survey, to more accurately reflect how the buy-side values and rewards the sell-side for their research advisory services, rather than based on Assets under management (AuM).
II surveys are the leading provider of market sentiment in the financial industry and the last eighteen months have seen significant investment in a new voting platform. In the wake of MiFID II regulations, increased transparency by the investment management firms has brought unprecedented levels of reporting on consumption of research advisory services. The research providers, however, still demand an independent and qualitative measure of the value provided by their analysts. A large number of buy-side firms now submit their research evaluations on a coordinated basis to reduce the disruption to the industry, improving the integrity of the data and validity of the final results.
In addition, this year’s survey sought to capture market sentiment on a more granular level with the inclusion of thematic research and an expansion of ESG categories.
Selection Criteria
To select the members of the Emerging EMEA Research Teams, Institutional Investor solicited opinions of directors of research and investment professionals at asset management firms with a commission and/or a research wallet of at least US$100k and who are recognized as using sell side research advisory services. For the Emerging EMEA survey, we received responses from more than 922 individuals at 517 firms. The names of individuals surveyed are kept confidential to ensure their continuing cooperation.
Participants rated their top firms in each sector and then separately rated individual analysts at those firms to create two distinct rankings for each sector. A numerical score was produced by weighting each vote based on the responding firm’s assets under management in the sector and the average rating awarded. This created the AuM-weighted rankings.
Using those scores, ranks were determined. Firms/analysts are awarded a “Runner‐Up” position if their score comes within 35 percent of the third-place score in a sector. For the analyst rankings, the cut-off date for individuals is the date of the survey opening (2nd March 2020).
Voters must meet strict eligibility requirements, and winners must achieve a minimum vote count. All ballots are subject to review by the Research Operations Group.
Sales & Corporate Access
In addition to Research, voters are invited to rate firms on both Sales, Corporate Access, and Corporate Broking criteria at the firm level only. Voters may rate up to seven firms in Generalist Sales and then assess each firm on a number of criteria. The top 10 table was produced based on overall vote count.