Credit Lyonnais well ahead of the field in China securities research
CREDIT Lyonnais has not only held on to its lead in China securities research, it has added a huge margin to it.
The group is also making inroads on the top rankings in blue chip and smaller company research.
To date, Credit Lyonnais is the only brokerage to make the commitment and invest in a large team covering China securities across the board.
Its China Monitor is the most thought provoking, well-researched and comprehensive work in the sector.
China research team head C.Y. Ho said: ''We have made the commitment to comprehensively cover China companies and have put in the resources to develop expertise and experience.'' The lack of company disclosures, industry data and access to some of these companies has been a major problem for brokerages aiming to put out quality product in this under-researched area.
Credit Lyonnais is planning to develop research along themes covering sectors including petrochemicals, power and transport. Seen within this context, obtaining a better picture of where particular companies are going is made slightly easier.
In previous years, China research has been voted the worst quality sector for broker research. However, in the last 12 months there has been a big shift in opinion among local fund managers.
In previous years, 24 per cent of the survey sample said China securities research was very poor or awful and a massive 68 per cent thought it was poor or average, taking the total tally of those who thought it was average or below to 92 per cent.
In the current survey, 18 per cent of respondents thought China securities research was very poor or awful. About 45 per cent said it was average or poor, taking the total who thought it was average or below to 63 per cent. The remaining 35 per cent, after taking in ''no comments'', thought it was good.
There are a number of key factors in Credit Lyonnais' success.
These include the establishment of a strong, knowledgeable sales team following the head hunting of Mike McCoy from HG Asia three years ago.
The brokerage is an arch marketing machine when it wants to be. As a whole the brokerage does not like media coverage for fear of being misquoted or misrepresented.
However, on a strategic basis it seeks to obtain blitz coverage of certain types of research where data are hard to come by.
This has given it a high profile and an enhanced reputation in particular areas.
The packaging of the research product is lively, using caricatures, cartoons and provocative headlines. Its Watchdog product, which undertakes research not readily available elsewhere, including directors' dealing, has a strong following.
The China Monitor is seen as something of a flagship with interesting features and innovative ideas, including analysis not yet being done elsewhere such as a survey of China fund managers.