Central Europe (Czech Republic, Hungary, Poland)
Tomasz Walkowicz & team UBS
Tomasz Bardzi⁄lowski & team UniCredit
third team Andrzej Knigawka, Janos Kocsi & team ING
runners-up Radoslaw Bodys & team BofA—Merrill Lynch; Citi; Tomasz Krukowski & team Deutsche
Unranked last year, the seven-strong UBS squad captained by newcomer Tomasz Walkowicz, 35, shoots straight to the top, sharing the winner’s circle with last year’s No. 2 team, the 12-analyst UniCredit Global Research troupe. Declares one fan of the UBS analysts, who are based in London and Zurich, “They keep me up-to-date when things happen.” A lot was happening last year, as worldwide economic turmoil wrought havoc in Central Europe, dragging the Czech Republic’s stock market down 41.7 percent, Hungary’s down 58.5 percent and Poland’s down 47.2 percent. Many of the team’s most successful calls were bearish, such as a January 2008 recommendation to sell Polish petrochemicals manufacturer Polski Koncern Naftowy Orlen, at 50.55 złoty, on management concerns. The stock tumbled 55.7 percent, to Zł22.40, through January 2009. Walkowicz, who earned an MBA at the IESE Business School at Barcelona’s University of Navarra in 2006, joined UBS last year from Fitch Ratings, where he worked as a credit analyst covering Central European banks. UniCredit’s team is now led solely by Tomasz Bardziłowski after the firm named former co-leader Mark Robinson its top emerging-markets equity strategist. (Robinson’s squad finishes third in Equity Strategy.) The group, which has offices in Budapest, London, Prague and Warsaw, provides “the most extensive and in-depth” coverage of the region, according to one buy-sider. The analysts initiated coverage with a buy recommendation on Polish pay-TV operator Cyfrowy Polsat at the company’s initial public offering in May, citing strong growth prospects. By the end of January, the stock had surged 17.0 percent, compared with the broad market’s 46.5 percent plunge. Falling from first place to third is the nine-analyst ING Equity Markets crew guided by Andrzej Knigawka and Janos Kocsi. Headquartered in Budapest and Warsaw, the team told investors to sell Polish engineering firm Polimex Mostostal in September, at Zł5.64, anticipating a slowdown in construction. The stock slid to Zł2.70 by mid-January, and the analysts upgraded it to hold. It closed the month at Zł2.47.
Israel
Darren Shaw & team UBS
second team Haim Israel & team BofA–Merrill Lynch
third team Daniel Harverd & team Deutsche
New team leader Darren Shaw, 38, pilots the UBS quartet from third place to its first appearance in the winner’s circle since 2006. In August the Herzliya, Israel–based team upgraded defense-electronics manufacturer Elbit Systems to buy, at 18,710.00 shekels, largely on valuation. By the end of January, the share price had slipped to 18,300.00 shekels, a loss of 2.2 percent that paled in comparison to the broad market’s 20.4 percent plunge during the same period. Shaw, who earned a bachelor’s degree in economics at the U.K.’s University of Manchester, joined UBS in 2006 after ten years as a construction analyst with Dresdner Kleinwort. “I can call him up on any situation, and he’s always up-to-date and always has a handle on how the market looks,” declares one of Shaw’s satisfied clients. For the past two years, Haim Israel had the top spot all to himself; this year the Banc of America Securities–Merrill Lynch analyst leads a two-member team to the No. 2 position. Israel also heads the No. 2 team in Chemicals. Clients praise the Tel Aviv–based duo’s “honest assessment of the market” and skill at “looking at politics and the geopolitical environment’s impact on stocks.” In June the team upgraded Teva Pharmaceutical Industries from neutral to buy, at 14,900.00 shekels, on strong cash flow and stable growth. By the end of January, the stock had surged 9.2 percent, to 16,720.00 shekels. Although they drop a notch to No. 3, the Deutsche Bank trio conducted by Daniel Harverd continues to impress investors with “detailed think pieces” and “actionable trading ideas.” One example: the Tel Aviv–based team’s October 2007 upgrade from hold to buy on Bezeq Israeli Telecommunication Corp., citing the cellular phone service provider’s cost-cutting initiatives. Through January 2009 the stock outperformed the MSCI Israel index by 20.4 percentage points.
Middle East & North Africa
William Manuel & team HSBC
Debuting in first place in this new sector is the 11-strong HSBC Bank squad guided by London-based William Manuel. With offices in Cairo, Dubai and Riyadh, the team covers 55 stocks in eight countries. Last year proved to be a tale of two markets across the region. In the first half of 2008, rising energy prices fueled stock rallies in many Mideast countries as investors sought moneymaking opportunities and safe havens from the credit crisis unfolding in the West. In the second half, oil prices began to plummet and dragged the markets down with them; the MSCI Arabian markets index ended the year down a whopping 54.8 percent. Through it all, the HSBC team kept clients informed of fast-moving events: “Every time we needed advice, they provided good insight,” says one grateful buy-sider. The analysts’ winning calls last year included a September downgrade to underperform on the Dubai Financial Market, in anticipation of a drop-off in business at the UAE stock exchange as jittery investors pulled money out of the Gulf state. By the end of January, the shares had plunged 73.4 percent. Manuel, 39, who earned a bachelor’s degree in management science from the U.K.’s University of Manchester in 1991, worked as a leisure analyst at Merrill Lynch before joining HSBC in 2000. No team earned enough votes to warrant publication of a second or third place.
Russia
Roland Nash & team Renaissance
second team Evgeny Gavrilenkov, Paolo Zaniboni & team Troika
third team Julia Bushueva, Benjamin Carey & team UniCredit
runners-up Karen Kostanian, Odile Lange-Broussy & team BofA–Merrill Lynch; Yaroslav Lissovolik, Mikhail Seleznev & team Deutsche; Peter Westin & team J.P. Morgan; Alexei Morozov, Dmitry Vinogradov & team UBS
On top for an eighth year running is the 22-member Renaissance Capital force guided by Roland Nash, who also leads the top-ranked team in Equity Strategy. The Moscow-based analysts are “well-connected and understand the country’s politics,” observes one backer. Properly bullish on Russia during the first half of last year — the Russian Trading System index gained 8.6 percent through mid-May before plunging — the team pivoted in the second half, telling clients in July that tanking oil prices and a government investigation into alleged price-fixing at steel producer Mechel would bring an abrupt end to Russia’s reputation as a safe haven for investors seeking refuge from the worldwide credit crisis. They were right: The RTS index ended the year down an eye-popping 72.4 percent. On individual stock recommendations, the analysts were far less astute. “We didn’t do very well in making predictions for 2008 — I think it was more the honesty with which we admitted our mistakes that clients appreciated,” says Nash, 36. The 31 analysts on the Troika Dialog team co-led by Evgeny Gavrilenkov and Paolo Zaniboni jump from runner-up to second place. Prized for what one investor calls “a good nose for policies that the Kremlin is likely to pursue,” the Moscow-based team reiterated its buy recommendation on the global depositary receipts of KazMunaiGas Exploration Production in October, at $13.75, reasoning that the shares were trading “like a distressed asset.” Although the GDRs initially sank, falling to $10.10 in November, they have since begun to rebound and closed January at $12.70. The 14-analyst UniCredit Global Research squad repeats in third place. Co-captained by Julia Bushueva in Moscow and Benjamin Carey in London, the team presents “the facts that lead investors to draw their own conclusions,” notes one client. A slowing economy and asset-quality deterioration prompted the team to issue sell recommendations on a pair of Russian financial institutions, VTB Bank and Vozrozhdenie Bank, in July. Through January the stocks tumbled 83.0 and 78.9 percent, respectively.
South Africa
Andrew Cuffe & team J.P. Morgan
second team John Slettevold & team UBS
third team Julian Wentzel & team Macquarie
runner-up Rhys Summerton & team Citi
Andrew Cuffe pilots the 19-analyst J.P. Morgan Securities squadron to a second consecutive first-place finish. The Johannesburg-based researchers earn applause from one money manager for “their insight into the local market and their understanding of the economic headwinds.” Those winds have been battering South Africa’s stock market, but Cuffe, 42, and his colleagues told investors in July that food retailers would weather the storm. Among the companies they recommended was supermarket operator Shoprite Holdings, which through January soared 36.3 percent, far outpacing the broad market’s 17.1 percent decline over the period. “They do an impressive analysis,” cheers one backer. The ten-strong team at UBS steered by John Slettevold, in second place for a third year running, provides what one enthusiastic investor calls “a long-term, historical perspective on South African retailers that is particularly enlightening.” And profitable, as evidenced by such calls as the Johannesburg-based team’s June upgrade to buy on food-and-beverage distributor AVI, dubbed a bargain at 1,265.00 rand. The stock skyrocketed 64.4 percent, to 2,080.00 rand, by early January, and the analysts downgraded it to hold, on valuation. It closed at the end of January at 1,949.00 rand. The Macquarie Equities quintet directed by Julian Wentzel debuts in third place. The researchers “not only do a good job linking the supply in South Africa with the demand in China but, adding in London, give you the global picture,” explains one portfolio manager. The Johannesburg-based team initiated coverage of Grindrod in December with an outperform rating, on strong growth prospects for the shipping and freight transportation provider. By the end of January, the stock had sailed ahead of the sector by 28.5 percentage points.
Turkey
Michael Harris & team BofA–Merrill Lynch
second team Marianna Kozintseva & team J.P. Morgan
third team Serhan Gok & team Deutsche
runner-up Cüneyt Demirgüres¸ & team EFG Eurobank
Rising one rung to claim the crown for the seventh time in the past eight years, the Banc of America Securities–Merrill Lynch quartet led by Michael Harris “does a good job of finding cheap stocks,” asserts one client. One example is the Istanbul- and London-based team’s yearlong outperform rating on Bim Birles¸ik Magˇazalar, “on the strength of its business model,” says Harris, 39. Shares of the discount retailer outpaced the sector by 26.3 percentage points and the broad market by 43.9 percentage points in 2008. In September the analysts downgraded Asya Katılım Bankası to underperform, citing concerns over the bank’s liquidity. By the end of January, the stock had plunged 50.2 percent, against a sector loss of 45.7 percent. “I’ve been particularly impressed by their work on the financial sector, which is 50 percent of the action in the local market,” observes one money manager. Shooting straight in at No. 2 is the previously unranked J.P. Morgan Securities foursome overseen by Marianna Kozintseva, a former Bear, Stearns & Co. analyst who joined the firm after JPMorgan Chase & Co. acquired Bear Stearns Cos. last spring; New York–based Kozintseva left J.P. Morgan in January. The team launched coverage of telecommunications services provider Türk Telekomunikasyon in December with a buy rating, at 3.46 Turkish lira, on valuation. Through January the stock had surged 23.1 percent, to Tl4.26. “These analysts provide interesting investment ideas,” notes one buy-sider. The six-strong Deutsche Bank team, captained since June by newcomer Serhan Gok following the departure of Idil Dagdelen, drops from first place to third but retains an avid following. “They not only follow mainstream names, but have also done very good work on a variety of smaller business,” observes one money manager. The Istanbul-based team publishes Idealog, a revolving list of preferred stock calls that last year included iron and steel manufacturer Eregˇli Demir ve Çelik Fabrikalari, industrial construction outfit Tekfen Holding, and mobile phone operator Turkcell Iletisim Hizmetleri, among others; the model portfolio returned 13.5 percent in 2008, according to Gok.
Ukraine
Wilfred Willwong & team Renaissance
second team Andrey Bespyatov & team Dragon
New leader Wilfred Willwong guides the ten-member Renaissance Capital team to a second straight year in first place. One longtime client praises the team, which is based in Kiev, for publishing research that is “tailored to institutional investors, while other brokerages are more attuned to retail investors.” Ukraine has been among the hardest-hit victims of the global recession — the benchmark PFTS index sustained a 74.9 percent loss in the 12 months ended January 31 — but even so, the RenCap squad was able to identify moneymaking opportunities for clients. In November the analysts reiterated a long-standing buy recommendation on Motor Sich, at 258.00 hryvni, on valuation. The aircraft-engine manufacturer’s shares took off, soaring 46.5 percent, to 378.00 hryvni, through January. Willwong, 36, earned a master’s degree in finance at the U.K.’s University of Lancaster in 1996 and worked as a money manager at Barings Asset Management before joining RenCap in 2007; he left the firm in December. Holding steady in second place for a second year is the 13-strong Dragon Capital team captained by Andrey Bespyatov. Fund managers applaud the Kiev-based team for its “good strategy reports” and for being “influential in the market.” The group’s most successful calls of the past year include an October downgrade to sell on Komsomolets Donbasa Coal Mine, on falling prices for commodities in general and for coal in particular. By the end of January, the share price had dropped 35.4 percent and trailed the broad market by 54.3 percentage points. No firm received sufficient votes to merit a third-place ranking.
