C.H. Stirling, a leading UAE investment banking advisory firm, announces the formation of Stirling Analytics, a division which will provide a range of investor relations and capital market intelligence services to listed UAE companies. Heading Stirling Analytics will be Scott Fulton, a former Extel-rated research analyst with Merrill Lynch, Pierce, Fenner & Smith and Credit Suisse.
Stirling Analytics is the only dedicated provider of capital markets intelligence in the MENA market. The initial service will advise companies on how to manage their research analyst expectations more efficiently. This is driven by our belief that the views of research analysts, working for brokers and investment banks, will become more important as institutional investors increase their participation in UAE equity capital markets. Through understanding more about the detail of these views, UAE companies will see greater stability in valuations and equity prices, giving investors more confidence and, as a result, improving companies’ ability to align corporate strategy with capital market access.
UAE equity capital markets have been under-utilised by companies in the last five years. Despite speculation regarding IPOs, to date, few companies have come to the market in 2014. In addition, while trade in issue rights has been agreed and the development of market making put in place, there have been very few, if any, listed companies who have raised additional capital through secondary issues. Stirling Analytics believes that this is changing rapidly, potentially prompted by Emerging Market status, but companies will need to improve the link between share prices and market expectations in order to provide the stability required to seek new funds from long term, institutional investors into the UAE.
Commenting on the news, Christopher Flinos, Managing Director, C.H. Stirling, said; “Clearly, the first step to this process is a strong investor relations department. With an investor relations function now a regulator requirement for all UAE listed companies, we believe that the creation of Stirling Analytics is very timely. Investor Relations is still in the early stages of development and we recognise that many companies will require assistance. Initially in ensuring that Investor Relations departments are structured appropriately and also in terms of managing the equity capital market’s expectations by improving the link between underlying financial performance and the analysts’ forecasts”.
Scott Fulton, Director, Stirling Analytics, commented; “As a former analyst, I understand the benefit of relevant and regular communications from companies. The ability to understand exactly where your forecasts stood in the context of the market range was invaluable. This is particularly true of UAE companies at present, as the inclusion of certain companies within the MSCI Emerging Market Index highlights that the equity capital markets are being taken seriously internationally. This increased attention is likely to result in more analysts researching more companies. Initiating coverage on a new company requires considerable time and effort. It is made much easier if a new analyst is able to view a detailed consensus of current forecasts. Our service supports IR departments in providing existing and potential analysts with the information they need; this is capital markets intelligence”.
Managing Director, C.H. Stirling
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