CLSA and Sanford C. Bernstein & Co. have agreed to share research to institutional customers. Analysts for each firm will be able to consult each other and utilize both companies' libraries and databases to produce reports. However, there is no financial agreement between the two brokerage firms for the sharing of the research.
"It will be a free flow of information where we will each have the ability to access material from each other on an attribution basis," explains CLSA's executive chairman Gary Coull. Initially, he says, analysts will talk to each other on an ad hoc basis, but further down the road jointly branded research reports may be in the offing.
Both firms say they have strong teams of equity research analysts but neither has a significant presence in the other's market.
"With the world's economic centre of gravity shifting to Asia, it is more important than ever to have an in-depth perspective on both sides of the Pacific," says CLSA's Coull. "In Bernstein we have found a research partner who shares our values of independent, in-depth research that is unconflicted."
"Today, global firms ignore Asian competitors at their peril and Asian demand for raw materials, finished products, and financial services is influencing global pricing and demand trends. Coverage and data from Asia will help to strengthen and deepen our US research coverage," adds Sanford Bernstein chairman and chief executive Lisa Shalett.
An example of how the shared research will help Asian investors is in the retail/consumer investment story. Obviously knowing what US consumers are buying and at what pace is critical information for Asia-based suppliers. Changes in consumer patterns show up much faster in US quarterly results - and the Bernstein researchers have greater access to such data, which will then help CLSA analysts offer more richly-detailed research to Asian suppliers.
The same theory applies in other industries, such as technology, where many of the suppliers are in Asia but the consumers are in the US. And of course the arrangement will help CLSA make valuation comparisons more easily in the US rather than relying on consensus numbers.
CLSA, which is the brokerage arm in Asia of France's largest bank, Credit Agricole, has 90 analysts in the Asia Pacific region and covers 12 sectors. Bernstein has 55 analysts in the US who are responsible for 50 sectors.