If one asks the main brokers on the market about their development plans, a constant answer would refer to the development of the research department. However, as they would immediately add, the managers of brokerage firms, have trouble finding “good” people. The capital market is strongly affected by the lack of good analysts, and one can count on their fingers the brokerage firms that have “real” analysis departments, as the brokers themselves state. Not only the customers are dissatisfied with this situation, but also the brokerage companies, which even consider hiring foreign analysts to run the research departments.
At the same time, the very few analysts “well rated” on the market, are constantly “hunted” by the other brokerage firms. This summer, Liviu Giugiumica, the former general manager with BRD Securities, left to join rival brokerage CA IB Securities, taking his entire team of analysts along.
“There is, indeed, an obvious deficit of good analysts on the market, and I felt that myself,” states Marian Dinu, head of Alpha Finance Romania securities firm.
Until not long ago, the need for research departments was felt especially among brokerage companies, which worked especially with foreign institutional investors that always need a piece of advice or a recommendation before deciding to invest.
The demand coming from domestic clients was rather weak, especially considering that, as of 2000, the Stock Exchange had witnessed a strong upward trend, with the first changes emerging as early as last year. Amid this constant market growth, it was very hard to “find” a share to buy and incur losses.
Under the circumstances, the investors did not feel a strong need for research, as their decisions were based on their personal inspiration or on the brokers’ recommendations, who relied on information with narrow reach at beast.
The coming of some periods of downturns, along with the “feeling” that some of the main shares on the market were rated “correctly” or even overrated, prompted domestic clients to increase their demand for well grounded analyses.
“Another reason for the need for research departments derives from the institutional obligation imposed by the European Union, that, in my opinion, it was covered enough in the CNMV regulation,” says Marian Dinu.
The National Securities Commission (CNVM) this year issued regulations regarding the compliance with the EU stipulations, which, among others, do not allow brokerage firms to make any recommendations unless they have their own research departments.
According to Dinu, there are 73 brokers on the market at the moment, but less than half of them have their own research departments. The lack of good analysts on the market is also confirmed by some of the managers of research departments.
“What is most difficult is to find the senior analysts, which are very few and are required by all the brokerage agencies,” stated Adriana Marin, head of research department within CA IB Securities.
Brokerages · ZF English
Good analysts hard to find on capital market
Good analysts hard to find on capital market