HSBC analysts will be spared the chore of stamping sell recommendations on half the stocks in their coverage area under the firm's recent restructuring of global equity analysis, according to an executive of its Asian brokerage arm. 'Clearly, we follow stocks that we kind of like so as a result there is a natural skewing towards buys,' HSBC Securities (Asia) head of Asian product Mark Coggins said. The restructuring announced on Monday will require HSBC analysts worldwide to recommend a buy or sell based on a stock's expected performance relative to the appropriate sector or country. The hold recommendation will be abolished and initial reports suggested this would create equal numbers of buys and sells by analysts. However, this would not translate into equal numbers of buys and sells as HSBC - like most brokerages - did not cover every stock in each sector or market, Mr Coggins said. So analysts choose to follow the companies that will generate greater returns for clients and which therefore are expected to outperform the sector or market - thereby causing the skew towards buy recommendations. HSBC's London-based global head of research Mark Brown said there were sectors where HSBC had almost complete coverage which under the new system would give an equal number of buys and sells. 'There are a lot of sectors where we have pretty much complete coverage,' said Mr Brown, who cited a recent report on European banks as having an even spread of recommendations. Earlier in the week, Mr Brown said the implementation of his new recommendation would be 'sensitive' in Asia. In Europe, HSBC plans to measure a stock's performance relative to the sector but in Asia stocks will be assessed on a country basis. Investors in Asia are country-biased and sectors within different markets are small, making it difficult to get a meaningful comparison between a stock's performance and the industry. 'In Europe, the sector perspective is the dominant force - that is not the case in Asia,' Mr Brown said. HSBC plans to use alternative measures of a company's performance more to overcome difficulties in making comparisons between different markets. Common measures such as earnings before interest, tax, depreciation and amortisation do not take into account the different tax rates and risk among other factors across countries which could have an impact on a firm's performance. 'There has been a lot of blind adoption of things that kind of work when you've got homogenous markets but don't when you've got significant differences,' Mr Coggins said. HSBC also wants to use the restructuring of its research to boost its global presence. 'We consider ourselves to have large portions of global coverage,' Mr Coggins said. 'My feeling is that is not well understood and appreciated by the market.' HSBC's restructuring plan of equity research was conceived 18 months ago and comes amid mounting criticism of the quality of brokerage analysts' research.