When it comes to providing access to Asias corporate chieftains, no single firm stands out in investors minds as the undisputed champion. Bank of America Merrill Lynch and Credit Suisse climb from second place to join last years winner, Morgan Stanley, atop Institutional Investors 2016 roster of Asias Top Corporate Access Providers. Each earns a place in every one of the surveys 18 industry sectors.
However, when a rating of 4 is applied to each first-place position, 3 to each second-place position and so on, Morgan Stanley pulls ahead of the pack, with a weighted score of 64 to BofA Merrills 45 and Credit Suisses 40.
In fourth place overall is UBS, with 17 spots, followed by Citi, with 13.
A total of 47 firms make the cut (plus an additional 28 that receive an honorable mention). Click on the Leaders link in the navigation table at right to view the highest-ranked institutions.
Data regarding ranked firms not appearing here are available from the Institutional Investor Research Group; for information please contact Esther Weisz at 212-224-3307 or email@example.com.
Each year II asks money managers that vote in the broader All-Asia Research Team survey to indicate which sell-side firms excel at arranging meetings with the regions executives, and this year we received responses from some 2,220 investors at 860 institutions that collectively manage an estimated $1.4 trillion in Asia ex-Japan equities.
Despite slowing growth in emerging markets and talk of currency wars, the Asia-Pacific region remains a hot destination for investors capital, but money managers keen to meet with the men and women running the companies they invest in can face a variety of hurdles depending on the country.
Australia, Hong Kong and Singapore have the most investor-friendly and transparent business environments in the region, according to Vincent Chui, head of Asia equity distribution at Morgan Stanley in Hong Kong. Access in China and India is not an issue, but who you actually manage to meet depends to a large degree on the sell-side relationship and their knowledge of who and what matters most, he observes.
In China many companies have headquarters outside major cities, so good corporate access providers must also be logistics experts, he adds.
Morgan Stanleys biggest annual events are its China Summit in Beijing in May, India Summit in Mumbai in June and Asia-Pacific Summit in Singapore in November. Together they drew more than 2,000 institutional investors and 500 companies in over 5,000 private meetings last year. Typically, one third of the corporate attendees are chief executive officers and chief operating officers, while some 40 percent are chief financial officers.
Demand is highest for meetings in China and India, according to Shariff Koya, Hong Kongbased head of Asia-Pacific research marketing, corporate access and account management at Bank of America Merrill Lynch. With the implementation of the ShanghaiHong Kong Stock Connect in 2014 and upcoming launch of the ShenzhenHong Kong connect program, overseas investors are finding it easier to invest in a larger swath of Chinese companies.
Meanwhile, the leaders of those corporations are likely to become more forthcoming now that Beijing has introduced regulations to bring the governance of Chinese corporations in line with international standards. Understanding the enhancements in Chinas corporate governance is an important part of the investment process that investors are keen to become more familiar with, he notes.
However, a shift in compliance culture wont happen overnight, Chui points out, and investors will be the primary agents for bringing about change. Ultimately, corporate governance is about doing the right thing, he says. Unless investors can look senior managers in the eyes and say they can trust them to do the right thing, they wont invest.
Most Chinese managers, particularly those at state-owned enterprises, are not compensated like their Western counterparts and tend to be less concerned with stock price performance, making it ever more important that their investors fight for face time. Establishing a personal rapport with Chinese managers certainly goes a long way to getting more air time and thus understanding on companies, Chui adds.
Ahead of last years announcement from MSCI regarding the potential inclusion of China A shares in its global indexes, BofA Merrill hosted an investor forum in Hong Kong with exchange officials, MSCI representatives and executives from A-share companies to help fund managers gain insight into the dynamics of investing in this market. The conference drew 20 corporate leaders and 180 investors.
In November the firm held its eighth annual China Conference in Beijing. Liaquat Ahamed, the Pulitzer Prizewinning author of Lords of Finance: The Bankers Who Broke the World, delivered the keynote speech to an audience of some 200 executives and 600 money managers.
With so much investor interest in Asia, theres enough demand for corporate access to go around. In the past 12 months, Credit Suisse has arranged some 780 corporate access events 60 thematic tours, 670 tailored trips and 50 group trips in which more than 10,000 business leaders and clients connected to discuss investment ideas and opportunities. The Swiss bank has a full pipeline of conferences. Its 19th annual Asia Investment Conference, held in Hong Kong last month, drew a record 320 company representatives and over 2,000 investors.
A clear trend I notice is that clients are now requiring a one-stop-shop where they can get access to quality companies, backstopped with well-organized logistics, observes Vijay Harjani, head of Asia-Pacific corporate access at Credit Suisse in Hong Kong. Our corporate access team and research analysts, in conjunction with our investment bankers, have pulled together ironclad, thematic schedules with decent C-level access, dovetailed with seamless logistics.
Enlisting regional experts on corporate access can also help foreign investors avoid some of the common pitfalls around business culture and customs in foreign lands. Chinas tradition of gift giving, for example, has long fostered a breeding ground for bribery and unethical business practices. Since 2012, when President Xi Jinping launched a vigorous campaign against corruption, tens of thousands of officials have faced punishment, and an unlucky few have even been given death sentences for accepting bribes. The crackdown may be pushing more corporate access behind closed doors, making the services provided by sell-side brokerages all the more important.
Chinese managers now tend to shun publicity, so it takes more persuasion to ask them to be a speaker at a large event, says Morgan Stanleys Chui. However, they continue to meet investors in small groups or one-on-one meetings.