It has been almost a year since the novel coronavirus was first detected in China, where it went on to trigger an acute health crisis and economic fallout that would soon go global.
But while most of world is still grappling with Covid-19, China is reporting little to no community spread and a market recovery. With the MSCI China Index up about 23 percent for the year and renewed investor interest in the Chinese A-share market, market observers are expressing cautious optimism.
“The past year saw a roller coaster ride for the global economy and to some extent [the] capital markets amid the Covid-19 pandemic,” said Eric Lin, head of research at UBS Securities Co., Ltd., the Chinese subsidiary of UBS. “China’s economy had suffered and recovered earlier than rest of the world, making it one of the few economies to grow GDP in 2020.”
Still, international and domestic clients remain focused on the pandemic, and whether China will continue to outpace rest of the world in terms of recovery, according to Lin.
Investors have turned to a top tier of domestic and international firms to help them answer that question, based on the results Institutional Investor’s eleventh annual All-China Research Team. While domestic firms still dominate, international firms have made significant inroads in 2020...
The Institutional Investor China Research survey (in partnership with Caixin) determines the best-in-class of sell-side research teams and provides valuable qualitative market feedback from market participants on optimising the provision, acquisition and consumption of Research Advisory services across China. Performance analysis on the data output allows in-depth comparative analytics which can be used for strategic business decision-making.
This year’s survey included five new sectors as well as a new macro category, Thematic Research, allowing asset managers to recognise value at those firms that can combine research from several sectors and assist investment strategy that may not be specific to a single stock or market. In total, voting took place across 29 sectors.
The Covid-19 crisis has not diminished the appetite by asset managers for sell-side research and advisory services, and it is clear that the competitive landscape remains tight. If research and commission wallets continue to decline, selecting the highest quality firms and analysts will continue to be essential for buy-side firms to justify how they spend their client’s, or their own, research budget.
We were pleased with the response rate for the survey, despite the uncertainty surrounding the pandemic. The survey results reflect the opinion of 3,621 portfolio managers and analysts at 891 institutions.
Selection Criteria
To select the members of the China 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. 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 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 (13 July 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.
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