Market Monitoring - 03/02/2020

Challenges arising from the MiFID II framework and impacts on corporate access

According to Bloomberg, the number of sell-side analysts reduced by 8% in 2019.  Budget for research analysts is expected to reduce by 20% to 30% in 2020.

The MIFID II framework brings new challenges to IR teams, mainly in terms of access to institutional investors, portfolio managers and buy-side analysts, which is done directly and without intermediation by brokers/investment banks.

Companies that have lost significant research coverage must have a more proactive IR approach. The importance of the IR website along with the format and quality of the communication materials are now more important than ever. IR professionals must also be able to more effectively identify and track investors – that is, understand who is accessing the website and what they are searching for. Crossing mailing and webcast analytics with the company’s shareholder base and targeting strategy is also fundamental.