Morgan Stanley is the top provider of Asia-focused research
for a third straight year after the banks sell-side
analysts helped investors navigate such concerns as
Chinas slowing growth, according
to Institutional Investors
2017 All-Asia Research rankings.
UBS Group AG climbed to second place, from fourth, as it
doubled down on its research team. Bank of America Corp. ranked
third, followed by Citigroup Inc. and Credit Suisse Group AG in
a tie for fourth, according to IIs survey
of 4,020 investment professionals managing an estimated $1.7
trillion in Asian equities.
The opening months of 2016 were fraught for Asian markets,
as a slowing Chinese economy sparked volatility throughout the
region. Add in the geopolitical uncertainties resulting from
Brexit and the U.S. election, and you have what UBSs head
of Asia Pacific research Damien Horth describes as a
Still, Morgan Stanley believed a sharp slowdown in China was
unlikely, according to Chetan Ahya, a managing
director who covers China, Hong Kong, and India for the
Better external demand and a rebound in private
[capital expenditure] will partly offset the deceleration in
credit-intensive investment growth, he said, adding that
the worst of disinflationary pressures were
Morgan Stanley was distinguished for its coverage of the
Chinese economy, the worlds second largest after the
U.S., coming in first place for its team led by analysts Edward
Xu and Richard Xu.
Analysts at the bank won other top team positions, ranking
first in such sectors as autos and auto parts, banks,
industrials, oil and gas, and telecommunications.
Chinas reform of state-owned enterprises has been a
major focus in its economy, particularly in the oil and gas
sector, where private investors have begun buying shares in
companies, according to Vikram Sahu, Asia Pacific research head
at Bank of America Merrill Lynch.
As for the rest of Asia, Morgan Stanleys head of Asia
Pacific research William Greene said the region has been a
key beneficiary of the global economic
The upswing in the global trade cycle will support
economic growth, reduce disinflationary pressures, and help
policymakers better manage the debt dynamic, Greene said.
The upturn in nominal GDP growth will give companies the
incentive to invest, resulting in better quality of
UBSs Horth also noted that Asian economies are
very connected to the global trade cycle but
warned that this could be a source of uncertainty for the
region as well as growth. The impending decision by
index-provider MSCI on which countries to include in its
emerging markets benchmark could give more influence to China
and Asia, he added.
Investors simply cant ignore the region,
UBS jumped to No. 2 in IIs rankings this year after
doubling down on its Asia research coverage, bolstering its
quantitative capabilities while adding a new team focused on
big data and geospatial analysis, according to Horth. The
return of a star analyst from maternity leave at the beginning
of last year didnt hurt, either.
UBS analysts were voted the best in sectors including
consumer staples, technology and IT services, and
transportation. The firm also earned a top spot for its
coverage of Australia and New Zealand, as well as for its
economic and quantitative research.
Though Bank of America Merrill Lynch slipped to the third
best provider of Asia-centric research, the firm maintained
high rankings in 29 sectors, besting Citi and Credit Suisse,
which tied for fourth.
Bank of America Merrill Lynch analysts were chosen as top
research providers for basic materials and internet companies,
while also ranking first for their Thailand coverage and
currency and rates strategy research.
The firms Sahu said environmental issues would likely
lead to supply constraints in basic materials, leading to
better buying opportunities, particularly as demand for steel,
coal and cement in China remains strong.
Although fourth overall, Citi received the most votes of any
firm for its real estate coverage, led by analyst Kam Keung
(Oscar) Choi. The bank also came in second place for its
research on China also spearheaded by Choi.
Credit Suisse, meanwhile, came in first for its coverage of
the insurance sector, as well as technology and semiconductor
companies. The firm also earned a No. 1 spot for its research
on Malaysia, while coming in second to UBS for its equity