With the ninth annual CFA Capital Market Awards - scheduled for June this year - fast approaching, the organisers CFA Society Sri Lanka reviews the award winners from the 2021 edition of its landmark event, which recognises and rewards professionals who have established benchmarks for the advancement of domestic capital market participants.

Among the five major accolades presented at the CFA Capital Market Awards are the honours for the Best Equity Research Team, awarded to Capital Alliance Securities (CAL Securities) last year. The award recognises teams working to develop research as an integral component of investment decision making, targeting fundamentals-driven, informed and efficient capital markets, and promotes the provision of high-quality and timely research to all market participants. CAL Securities has also been conferred the Best Sector Report title at the 2021 CFA Capital Market Awards.

Commenting on the award, CAL Group CEO Ajith Fernando notes “At CAL Securities, we consider our research team to be a key contributor to not only the stockbroking unit but across the organization. We were honoured to win the gold award for the best equity research team and best sector report at the 2021 CFA Capital Market Awards, and believe it is a testament to the team’s dedication to providing timely and relevant insights”.

CAL Group CEO Ajith Fernando

Reflecting on the role of investment research at CAL Securities, the team explains that it has evolved from catering purely to equity decision making to now cutting across all verticals and being a vital part of the organisation.

As a result of catering to many needs across the organization and the investment landscape having altered so much, the team at CAL Securities has witnessed significant changes both in its product offering and how insights are disseminated. Five to six years ago, its product line-up primarily catered to company and sector reports, and daily market reports whereas today, it includes partnered content to provide on-the-ground insights, primary research and macro research.

A greater focus is also given to what investors want to hear versus the team singlehandedly deciding on what solutions to offer, by eliciting regular feedback from investors and keeping the lines of communication open.

Head of Research at CAL Securities Trisha Peries, CFA, states that this has also led to a greater demand for macro and political research/insights: “Apart from equity research, there's an expectation for equity research teams to have a much deeper knowledge of macroeconomic conditions and their effect on certain counters.”

This has meant that CAL Securities’ spectrum of clients has expanded to include journalists, government institutions and the general public looking to boost their financial literacy and awareness.

The way data is communicated has also changed with a higher focus on voice cuts, videos, use of social media, and reports incorporating more graphical content. In addition, a balance is struck between keeping content concise given investor time constraints and providing the necessary depth of detail and analysis required to make informed decisions.

According to the team, the final aim is to deliver insights and provide a viewpoint that the investor has not yet received, with Chief Strategist Udeeshan Jonas, CFA, affirming: “We don't want to be yet another provider of generic information, so anything included in our reports needs to provide insights that the investors have not yet seen from another source.”

Spotlight on CFA Capital Market Awards

In terms of what CAL Securities did differently to win Gold in the Best Equity Research Team and Best Sector Report categories at the 2021 CFA Capital Market Awards, the team highlights improved standards of content along with communicating the requisite level of detail to investors in a user-friendly manner.

As Peries explains, “there's a difference in how people consume information today so it's important to disseminate information in the shortest time possible, with in-depth data to back up research. Apart from the traditional reports, there’s more video-based content and use of webinar formats, as investors want an insight into what industry folk are saying.”

The team believes this approach helped set them apart and enabled them to win the Best Equity Research Team award. CAL Securities also emphasises that each member played to their strengths focusing on their expert areas, with the team working together on much larger insight pieces such as sector reports as well.

With regard to the sector reports, the team notes that it takes a top-down approach with an understanding of the sectors that will see value creation, while maintaining that its insights go beyond their own research to draw insights from players across the value chain of a given sector.

Jonas notes that the team has incorporated the feedback received from the CFA Capital Market Awards to tweak products accordingly. He believes that this feedback is not merely a requirement of the awards, but a market requirement that enables to uplift industry research standards, which “has also led to an improvement in reports over the years.”

The team is of the view that the awards have helped CAL Securities, particularly in acknowledging the work done by equity research analysts, providing recognition not only in the local market but also globally by assisting in the marketing of research capabilities when launching operations in Bangladesh and attracting interest from clients as well.

As for further steps to be taken by the CFA Society, the team says helping to improve financial literacy and advocating for investment banking/equity research as a career option – not only at the university level but also in secondary education – should be on the agenda, as this will help provide a larger pool of talent for the industry at a time when attracting talent is becoming increasingly difficult. Moreover, improving the financial literacy of the larger investing public is encouraged so that they are able to make more informed decisions.

While industry players participate in these endeavours, CAL Securities believes that a global body such as CFA will give greater credibility to the process, bringing parties together and providing much-needed awareness to the market.

Photo - CAL Securities Research Team. From left to right: Trisha Peries, CFA - Head of Research, Nilakshi De Mel - Senior Analyst – Research, Ishara Nilam - Assistant Manager – Research, Pravir Goonewardene - Assistant Manager – Research, Udeeshan Jonas, CFA - Chief Strategist and Natalie Kulasekere - Senior Analyst - Research