Research goes global
6
financial markets
WHAT'S NewS Issue 3 March 1997
High quality research is increasingly recognized as a critical tooi with
which we can differentiate ourselves in financial markets. Rabobank
International's Financial Markets Research (FMR) unit in Utrecht -
comprised of seven professional analysts headed by Bernard Walschots
- has formulated a clear philosophy regarding its task. What's NewS
finds out how they put philosophy to work.
Latin America, and detailed thought is also
being given to the best regional distribution
of research capabilities to cover Southeast
Asia, China and the Antipodes. 'Overall,
we think that the Financial Markets
Research team will probably grow to some
20 analysts within the next two years,'
Walschots suggests. They will work in full
cooperation with regional sales and trading
teams. The aim is to establish a global view,
based on in-depth knowledge, which will
generate value for our customers
worldwide.'
Real support - Bernard Walschots chairs a
gathering of 'professionals': Niels Korleve,
Olaf van Thuss, Camiel Houwen and Paulus
de Vries (front left to right). Hans Honig and
Sander Bus are missing.
The job of FMR is not to prognosticate
about long-term macroeconomic trends: it
must provide timely analysis on currency,
money, and fixed income markets, as well
as on the important derivatives that build
on them, and to deliver data in a form that
can be translated into direct trading gain.
FMR's analysts are physically present in the
heart of the market action on the trading
floor. For them, the tradition of market
'philosophers' confined to separate ivory
towers is a thing of the distant past.
ANALYTICAL WEAPONS
'In any knowledge-based organization,
particularly one like Investment Banking, the
research function has to be closely integrated
with the actual process of achieving results,'
says Walschots. To sharpen our cliënt focus,
we need to give our people strong analytical
weapons that will help them deliver bottom
line rewards. Only those who can
successfully synergize their assets in analysis,
trading, and sales expertise will overtake
their competitors and gain a market lead.' In
addition to physically working together, our
researchers, traders and salespeople hold
regular daily and weekly sessions in order to
exchange ideas and evolve specific tactics.
These interactive spark-points serve to
synergize collective knowledge and create a
whole that is greater than the sum of its
parts.
SPREADING THE WORD
FMR also visits clients on a regular basis to
exchange market views and generates
several publications - some of them quite
new. These include a daily Market Update,
a series of new Country Bloc reports (which
deal with Core Europe, Scandinavia, and
Southern Europe on alternating weeks), as
well as the weekly Financial Markets
report, (received by all international offices
and available to clients as well). During
their recent gathering in London, Walschots
met with the treasury managers and
investment banking management team to
discuss several initiatives that will
significantly expand our global research
capabilities. In the second half of this year,
the London office will be adding three
dedicated research staff to deal with the UK
and the emerging markets of central and
eastern Europe. New York will gradually
build up its research capabilities, starting
with a technical analyst.
GLOBAL VIEW
Investigations are also under way on a
possible Sao Paulo-based team to focus on
RESEARCH
FINANCIËLE
MARKTEN
Goede research is een
voorwaarde om zaken te kunnen doen op de
financiële markten. Binnen Utrecht Branche
analyseert een zeven man sterk team de
financiële markten en handel in derivaten. De
informatie wordt niet alleen gebruikt op de
dealing room zelf, maar dient ook als basis
voor uitwisseling van ideeën met klanten en
als input voor diverse publicaties. Ook
binnen de rest van ons internationale
netwerk wordt gekeken naar het plaatsen
van eigen researchers, zodat wij uiteindelijk
wereldwijd over diepgaande kennis
beschikken voor onze klanten.
ACHIEVING SYNERGIES
Of course, Financial Markets Research is
just one part of a research network that has
evolved just as fast as the bank has
reconfigured its strategy. As a retail leader
on the domestic market, Rabobank's
traditional research needs were very
different from those that have emerged in i
recent times. The partnership with Robeco
brought the formation of additional
capabilities in the form of the IRIS joint
venture, for instance. This inevitably
produced certain overlaps but these are
being addressed with an eye towards
achieving synergies and efficiënt division of
labour. For example, Financial Markets
Research has been working closely with
IRIS's quantitative analysts (the so called
'quants team') to produce several useful
tools. These include a model for
equilibrium interest rates that can help
explain and (to an extent) predict market
trendlines, as well as a so-called 'rich-cheap
analysis' instrument to support the
arbitrage activities of trading and sales.
Financial Markets Research concentrates
on short-term forecasts, while IRIS
concerns itself with long-term analysis.
OVERALL MIX
The economie research department of
Rabobank Nederland is contributing
business cycle analysis to the overall mix -
as well as refining the format of its work so
that it more closely supports the
requirements of Investment Banking and its
clients. The Equity Research team within
Rabo Securities is on the verge of
supplementing its own capacities by adding
new professionals in Paris and Frankfurt,
whereas RI's Investment Banking units in
Warsaw and Budapest will add analysts for
their respective markets. The bank is clearly
developing at an extraordinary pace - in
terms of its product orientation, its global
positioning, and its a far-reaching dient
focus approach. The research operation, so
important to our standing in a competitive W
market, is evolving just as dynamically. It
helps Rabobank International establish a
clear market profile and demonstrable
value for its clients.