Independent And Affiliated Analysts
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Independent And Affiliated Analysts
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Author : Hao Xue
language : en
Publisher:
Release Date : 2018
Independent And Affiliated Analysts written by Hao Xue and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
The paper investigates strategic interactions between an independent analyst and an affiliated analyst in the context of issuing stock recommendations. Compared to the independent analyst, the affiliated analyst has superior information but faces a conflict of interest. I show that the independent analyst disciplines the affiliated analyst's biased forecasting behavior. Meanwhile, the independent analyst sometimes herds with the affiliated analyst to improve his recommendation accuracy. Because of the affiliated analyst's conflict of interest, the value the independent analyst expects to derive from his ex-post herding option is endogenous and can motivate him to acquire more information up front. As a result, herding and disciplining not only coexist but also mutually reinforce each other. That is, there is an endogenous complementarity between the independent analyst's ex-ante disciplining role and his ex-post herding behavior in equilibrium.
Do Affiliated Analysts Mean What They Say
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Author : Michael T. Cliff
language : en
Publisher:
Release Date : 2009
Do Affiliated Analysts Mean What They Say written by Michael T. Cliff and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
Many investors were upset with the losses they experienced by following the recommendations of stock analysts during the recent market downturn. Allegations that these recommendations were often tainted by investment banking relationships fueled their anger. This study examines the investment performance of stock recommendations made by analysts employed by lead underwriters as compared to analysts independent of investment banking. The results indicate that during the 1994-2005 time period, Buy or Hold recommendations from affiliated analysts underperform stocks recommended by Independent analysts. On the other hand, shorting their Sells earns significant abnormal returns. Announcement period returns suggest that the market over-reacts to Buys from affiliated analysts, but under-reacts to their Holds or Sells. Further analysis indicates that affiliated analyst recommendations are viewed as more credible following recent regulatory reforms.
Chaebol Affiliated Analysts
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Author : Ayca Altintig
language : en
Publisher:
Release Date : 2011
Chaebol Affiliated Analysts written by Ayca Altintig and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
Some Korean business groups, or chaebols, have a large stake in securities firms that issue analysts' reports on their member companies. This structure is unique in that industrial companies and securities firms are affiliated and operate within the same group. We investigate the informational content of earnings forecasts, stock recommendations and target prices made by the chaebol-affiliated analysts, using data collected between 2000 and 2008. The chaebol analysts tend to make more optimistic earnings forecasts for the member companies. The mean EPS forecast error (5.36%) of the affiliated analysts for the same chaebol company are significantly larger than that (3.23%) of other chaebol and independent analysts. The chaebol analysts also assign better recommendations by almost one level and set target prices 2.5% higher to the member companies after controlling for company and analyst characteristics. These results are consistent with the hypothesis that chaebol analysts' reports are biased by conflicts of interest. Stock market reactions do not differ in response to announcements of stock recommendations issued by affiliated vs. non-affiliated analysts. This suggests that capital markets do not recognize the conflicts of interest inherent in chaebol analysts' reports.
Independents Day Analyst Behavior Surrounding The Global Settlement
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Author : Jonathan Clarke
language : en
Publisher:
Release Date : 2009
Independents Day Analyst Behavior Surrounding The Global Settlement written by Jonathan Clarke and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
In this paper, we examine the impact of NASD Rule 2711, NYSE Rule 472, and the Global Research Settlement on the recommendation performance of independent, affiliated, and unaffiliated analysts. We find that analysts from all three types of institutions issued fewer strong buys following these regulations designed to separate investment banking and equity research. Affiliated analysts were less likely to issue innovative recommendations. While downgrades became more prevalent following the regulations, they were significantly less informative. Independent research firms set up after the Global Research Settlement are of inferior quality; they issue more optimistic and less innovative recommendations that generate lower announcement period returns than independent firms existing prior to the Settlement. Our overall findings question whether investors will be better served via the shift in equity research to analysts at independent research firms.
Wall Street Research
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Author : Boris Groysberg
language : en
Publisher: Stanford University Press
Release Date : 2013-08-07
Wall Street Research written by Boris Groysberg and has been published by Stanford University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-08-07 with Business & Economics categories.
Wall Street Research: Past, Present, and Future provides a timely account of the dramatic evolution of Wall Street research, examining its rise, fall, and reemergence. Despite regulatory, technological, and global forces that have transformed equity research in the last ten years, the industry has proven to be remarkably resilient and consistent. Boris Groysberg and Paul M. Healy get to the heart of Wall Street research—the analysts engaged in the process—and demonstrate how the analysts' roles have evolved, what drives their performance today, and how they stack up against their buy-side counterparts. The book unpacks key trends and describes how different firms have coped with shifting pressures. It concludes with an assessment of where equity research is headed in emerging markets, drawing conclusions about this often overlooked corner of Wall Street and the industry's future challenges.
Do Independent Analysts Provide Superior Stock Recommendations
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Author : Michael T. Cliff
language : en
Publisher:
Release Date : 2006
Do Independent Analysts Provide Superior Stock Recommendations written by Michael T. Cliff and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
Many investors were upset with the losses they experienced by following the recommendations of stock analysts during the recent market downturn. Allegations that these recommendations were often tainted by investment banking relationships fueled their anger. This study examines the investment performance of stock recommendations made by analysts employed by lead underwriters as compared to analysts independent of investment banking. The results indicate that during the 1994-2003 time period, affiliated analysts offered inferior investment advice for all recommendation categories except Sell. The paper then examines possible causes and finds that investment banking conflict of interest is a more complete explanation than a selection bias.
Underwriting Services And The New Issues Market
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Author : George J. Papaioannou
language : en
Publisher: Academic Press
Release Date : 2017-07-27
Underwriting Services And The New Issues Market written by George J. Papaioannou and has been published by Academic Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-07-27 with Business & Economics categories.
Underwriting Services and the New Issues Market integrates practice, theory and evidence from the global underwriting industry to present a comprehensive description and analysis of underwriting practices. After covering the regulation and mechanics of the underwriting process, it considers economic topics such as underwriting costs and compensation, the pricing of new issues, the stock price and operating performance of issuing firms, the evaluation of new issue decisions, and an analysis of the many choices issuers face in structuring new issues. Unlike other books, it systematically develops a critical perspective about underwriting practices, both in the U.S. and international markets, and with a level of detail unavailable elsewhere and an approach that reveals how financial institutions deliver underwriting services. Underwriting Services and the New Issues Market delivers an innovative and long overdue look at security issuance. Foreword by Frank Fabozzi Covers underwriting contracts and arrangements on pricing and costs Focuses on the financial consequences of the issuance decision for the firm Describes and evaluates decisions regarding the features and structure of new security offerings.
Investment Banking And Analyst Objectivity
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Author : Adam C. Kolasinski
language : en
Publisher:
Release Date : 2009
Investment Banking And Analyst Objectivity written by Adam C. Kolasinski and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
We find evidence that conflicts of interest arising from Mamp;A relations influence analysts' recommendations, corroborating regulators' and practitioners' suspicions in a setting, i.e. Mamp;A relations, not previously examined in research on analyst conflicts. In addition, the Mamp;A context allows us to disentangle the conflict of interest effect from selection bias. We find that analysts affiliated with acquirer advisors upgrade acquirer stocks around Mamp;A deals, even around all-cash deals, wherein selection bias is unlikely. Also consistent with conflict of interest, but not selection bias, target-affiliated analysts publish optimistic reports about acquirers after, but not before, the exchange ratio of an all-stock deal is set.
Gatekeepers
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Author : John C. Coffee Jr.
language : en
Publisher: OUP Oxford
Release Date : 2006-06-01
Gatekeepers written by John C. Coffee Jr. and has been published by OUP Oxford this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006-06-01 with Business & Economics categories.
In the wake of a series of corporate governance disasters in the US and Europe which have gained almost mythic status - Enron, WorldCom, Tyco, Adelphia, HealthSouth, Parmalat - one question has not yet been addressed. A number of 'gatekeeping' professions - auditors, attorneys, securities analysts, credit-rating agencies - exist to guard against these governance failures. Yet clearly these watchdogs did not bark while corporations were looted and destroyed. But why not? To answer these questions, a more detailed investigation is necessary that moves beyond journalism and easy scapegoating, and examines the evolution, responsibilities, and standards of these professions. John C. Coffee Jr, world-renowned Professor of Corporate Law, examines how these gatekeeping professions developed, to what degree they failed, and what reforms are feasible. Above all, this book examines the institutional changes and pressures that caused gatekeepers to underperform or neglect their responsibilities, and focuses on those feasible changes that can restore gatekeepers as the loyal agents of investors. This informed and readable view of the players on the contemporary business stage will be essential reading for investors, professionals, executives and business academics concerned with issues of good governance.
Corruption And Fraud In Financial Markets
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Author : Carol Alexander
language : en
Publisher: John Wiley & Sons
Release Date : 2020-06-22
Corruption And Fraud In Financial Markets written by Carol Alexander and has been published by John Wiley & Sons this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-06-22 with Business & Economics categories.
Identifying malpractice and misconduct should be top priority for financial risk managers today Corruption and Fraud in Financial Markets identifies potential issues surrounding all types of fraud, misconduct, price/volume manipulation and other forms of malpractice. Chapters cover detection, prevention and regulation of corruption and fraud within different financial markets. Written by experts at the forefront of finance and risk management, this book details the many practices that bring potentially devastating consequences, including insider trading, bribery, false disclosure, frontrunning, options backdating, and improper execution or broker-agency relationships. Informed but corrupt traders manipulate prices in dark pools run by investment banks, using anonymous deals to move prices in their own favour, extracting value from ordinary investors time and time again. Strategies such as wash, ladder and spoofing trades are rife, even on regulated exchanges – and in unregulated cryptocurrency exchanges one can even see these manipulative quotes happening real-time in the limit order book. More generally, financial market misconduct and fraud affects about 15 percent of publicly listed companies each year and the resulting fines can devastate an organisation's budget and initiate a tailspin from which it may never recover. This book gives you a deeper understanding of all these issues to help prevent you and your company from falling victim to unethical practices. Learn about the different types of corruption and fraud and where they may be hiding in your organisation Identify improper relationships and conflicts of interest before they become a problem Understand the regulations surrounding market misconduct, and how they affect your firm Prevent budget-breaking fines and other potentially catastrophic consequences Since the LIBOR scandal, many major banks have been fined billions of dollars for manipulation of prices, exchange rates and interest rates. Headline cases aside, misconduct and fraud is uncomfortably prevalent in a large number of financial firms; it can exist in a wide variety of forms, with practices in multiple departments, making self-governance complex. Corruption and Fraud in Financial Markets is a comprehensive guide to identifying and stopping potential problems before they reach the level of finable misconduct.