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The Research Emerging-Market Investors Count On

As competitors pull out of emerging European, Middle Eastern, and African markets, Bank of America Merrill Lynch is cementing its status as the region’s top research provider.

Emerging market investors in Europe, the Middle East, and Africa say there’s no better research provider than Bank of America Merrill Lynch.

For six years in a row, money managers investing in the EMEA region have ranked BofA Merrill Lynch as their preferred source of research. This year — in an updated version of the Emerging EMEA Research Team — BofA Merrill Lynch makes its seventh straight appearance at the top of the roster.

Eric Lopez, the bank’s head of EMEA equity research, says its long reign in emerging markets comes down to stability — namely, BofA Merrill Lynch’s willingness to continue devoting resources to the sector even when it is out of favor.

“When things become difficult, and this is especially true for emerging markets, you have some brokers decide to shut down offices and reduce headcount,” he said. “It’s important for us that we don’t go in and out of the market depending on whether it’s a good year or a bad year.”

According to Lopez, recent years have skewed more bad than good for the brokers serving emerging EMEA investors — and “a lot of firms, not the local ones, but firms of significance have closed down or significantly reduced their research output” over the last 18 months. 

Lopez said BofA Merrill Lynch has not lost any talent in the last year. In at least one case, the bank took advantage of the market dislocation to snap up new talent from a competitor.

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Going forward, Lopez expects the recent inclusion of Saudi Arabia into MSCI’s emerging market index to drive more interest from the global investors who use the MSCI index as a benchmark. It’s a positive development for BofA Merrill Lynch, which has a “big presence” in Saudi Arabia and Dubai.

“We try to understand what clients do structurally, and then try to be there for them,” Lopez said. “The goals are the same in emerging markets as anywhere else: Provide good content and good corporate access, and help clients make money.”

More than 2,100 portfolio managers and buy-side analysts from almost 1,000 asset management firms voted to determine the ninth annual Emerging EMEA Research Team. Voters — who ranked research providers as part of the 2019 Extel survey — separately rated firms and analysts across 18 sectors to create two leaderboards, one recognizing the top firms overall in each sector, and another recognizing the firms with the best analysts in each sector.

BofA Merrill Lynch topped both leaderboards. HSBC and UBS tied for second in the firm ranking, but HSBC came out ahead in the analyst-based ranking, where UBS placed third.

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