Wall Street Analyst moves to India

Came across this interesting article in the Integrity Research Associates site. The articles basically talks about how the Equity Research jobs are moving to India.

People here(in india) are covering companies just like an analyst would do in Wall Street. These folks at captive centres or the third party research centres are not only producing great research reports for companies already being covered but are also helping analysts cover more companies. One of my friend at one of these captive told me what he does.

There is an initiative which goes by the name Distressed portfolio management - here the team is given 8 - 10 companies and is asked to model the company and write the investment thesis for it. The team is scrutinised on every assumption that they have made from the onshore analyst team. After the onshore analyst is satisfied with the model he picks up a company, he thinks has best prospects and includes in his coverage universe.

In the process significantly lowering his research costs and increasing coverage of stock.

PS: The analyst would ideally pick up the company with best prospects and I have also seen analysts dropping coverage for companies that are not doing well consistently. I think this says something about why we dont have many sell ratings - Analysts would ideally like to cover a company for which he sees good prospects.