High in a Hong Kong skyscraper a fund manager is hunching over his laptop, trying to turn an honest dollar. It has been a tough year; funds under management have shrunk, and he says he needs all the help he can get. In the rubbish bin are a pile of analysts' reports. 'I throw 90 per cent of them straight into the bin. The standard of Asian research is crap,' he said. 'If you get 10 reports each with a buy on a company, then that would be a good enough reason for me to sell.' The reputation of Asian research has taken a beating in the past 10 months. Accused of missing the region's meltdown, many of its most-qualified proponents are pleading guilty. Up against the traditional and disciplined research industry in the United States and Britain, Asia's analysts look like pimply youths with smoking guns in their fingers. Jardine Fleming spokesman David Dodwell said: 'There is no one that does not have blood on his hands.' The blood is the colour green. The big US mutual funds are showing no signs of returning to the region yet. Forget long-term projections of recovery, average daily turnover at the Hong Kong stock exchange last month was $6.02 billion, compared with $31.8 billion in August last year. Credit Lyonnais global research director Edmund Bradley said he sympathised with the fund managers' lot. 'The fund managers are right to an extent. A lot of the research that has been done in the past two years missed out on what was going on, missed out on the big picture,' he said. 'For a lot of analysts out here it is their first job. They may have an MBA, but they have never seen anything like this, they have never seen things go wrong.' Mr Dodwell said the fact so many prestigious institutions, from the International Monetary Fund downwards, misread Asia's situation last year meant there had not been as much finger-pointing as one might have expected. He said an analyst's job in Asia was made tougher by the low levels of transparency in the region. 'In Asia, so much goes on off a company's books that unless you have close relations with the people involved, it does not matter how clever a company report is; it does not give the big picture.' Mr Bradley said one of the key mistakes Asian analysts made last year was to miss the level of hard-currency exposure many companies had, particularly in Indonesia. Regent Pacific fund manager Charles Howlett said: 'You take a look back at the research reports from a year ago and you would not know you were standing on the edge of the precipice. 'Generally, the research is a bit shoddy and there has not been a great improvement since the start of the industry's consolidation.' Across Asia, he said the best company research came out of Japan. 'But even they get their earnings forecasts wrong every year as well.' Mr Howlett is worried that as big US investment banks chase lucrative mandates from cash-strapped corporates, investment-banking aspirations may colour independent research. 'There is going to be more pressure to come out with bullish reports where they may not be justified.' Mr Howlett, who, at 26, has been in the industry for four years, is not totally negative about prospects of Asia's research establishing a half-decent reputation. 'It's just a question of getting experience, like myself,' he said. Hong Kong Investment Funds Association chairman Peter Lord said any fund manager who put too much faith in research was probably not doing his job. 'It would be negligent in this market to put too much weight on buy/sell recommendations, but that's not to say that there is no value in the data or research in reports,' he said. 'There is a lot of analysis out there which is very useful and it's good to know that someone is there who can do the grunt work.' Mr Lord, formerly head of LGT Asset Management, said the company encouraged managers to develop strong relationships with a handful of analysts whom they felt they could trust. It is an approach the bigger houses appear keen to promote, as they may feel their output is superior to that offered by smaller rivals. Howard Gorges, director of medium-sized South China Brokerage, said research produced by big houses could be just as bad as smaller firms'. 'Small firms may come up with just as good ideas even though they may not have the same credentials - you just have to be more choosy about what you take from smaller firms,' Mr Gorges said. Like others, Mr Bradley said the standard of Asian research was likely to improve as the industry's consolidation continued. A bad analyst out of a job was good for the trade, was the thinking. 'The quality of analysis will improve because only the better analysts will be left, and because of the fall in market turnover, they will focus on fewer stocks.'