Investment bank research is bad for your health, says one of Asia's top bankers.
Gary Coull, executive chairman of CLSA, reckons it should still be allowed but only if stamped with a warning like those on cigarettes and alcohol.
"If you can sell cigarettes that kill you with a health warning, I don't see why you can't sell stock research with a health warning," he told a banking forum in Hong Kong. Coull's caution would read: "Don't believe anything in this report, it comes from a very biased point of view."
Coull also believes that bulge-bracket research departments in Asia could become a thing of the past. "There will be less commitment by the bulge-bracket banks as they become less able to subsidize their Asian operations with Wall Street profits," he said. "But then I am not sure that Asia needs what they stand for anyway." He added that this would lead to greater opportunities for supra-regional research firms and more independent research.
Despite the slump in global prices as investors lose faith in equities, Coull remains optimistic. He thinks investors should look for stocks that are likely to provide modest capital gains and dividend yields rather than the spectacular growth experienced in the past.