Beat the street

Contributed by: Ishwar Chidambaram, CFA

Bloomberg needs no introduction, as over 365,000 Financial Professionals- including 165,000 analysts and Portfolio Managers rely on Bloomberg as their platform of choice. This represents a broad spectrum of industry participants, such as C-Suite, Investment Banking, Sales & Trading, Buy-side & Sell-side research, etc. On 12th February, 2014, IAIP organized a Bloomberg Equity Analyst Training Event in Mumbai. The event was held at the Bloomberg Office in Mumbai, and was conducted by Puneet Saxena, Application Specialist- Equities from Bloomberg.

The Event was flagged off by Joel Pannikot of Bloomberg, who laid down certain ground rules regarding housekeeping and etiquette. He handed over the floor to Puneet, who commenced the evening’s training program. He began his presentation, by depicting the Sell-side and Buy-side business model overview. The speaker clarified that Buy-side and Sell-side activities often overlap, and the workflow is similar across the two. Buy-side research is usually exclusive and not readily available to the public at large, as it is intended to support the Portfolio Manager and usually covers a specific sector. On the other hand, Sell-side research is quite easily available to the general public, and produced by Sell-side analysts working with Investment Banks and/or Brokerage Houses.

The speaker next covered the Objectives, Outputs and Challenges faced by both sets of industry participants. As per the speaker, Objectives include Ideation through content creation, supporting Sales & Trading with ideas generated and ultimately earning recognition from Institutional Investors. Outputs include in-depth analyses of companies (comprising Initiation Reports and Sector Reports), keeping track of event updates such as Earnings and Macro Events, as well as Sector/Industry/ Economy Outlook Reports and Industry Primers. Finally, Challenges faced by the industry include ensuring accuracy of data, generating alpha in a competitive market, ensuring adequate time spent on analysis, and relevant and timely news flows and sector-tracking.

The speaker next took the audience through the daily workflow for a typical Research Analyst, and presented the appropriate Bloomberg tools and commands to tackle the same. These included tools for tools for accessing News, Idea Generation, Tracking & Monitoring and Communication, among others.

The speaker gave special focus on Bloomberg Launchpad, which enables the user to monitor relevant information in real time. He took a specific example of the Bankex Index to demonstrate the Bloomberg Research and Idea Sharing functionality. Next he illustrated the Banks’ Debt Scoring Model to analyze various companies on the basis of their Financials, Interest Coverage, P/E, Trailing 12 month Revenues, etc. He also demonstrated the Events Tracking feature, using the same Bankex Index as an example.

Next the speaker used Reliance Industries as an example to demonstrate the versatility of the Bloomberg Terminal’s charting tool.  He showed how the short term moving averages crossovers can be used to generate buy and sell signals for specific securities. For the same security, he also pulled up the Relationship Map, which provides comprehensive details on Peers, Holders, Analysts, Board and Financial details for that security. He also illustrated how to pull up and access the entire Supply Chain of the company in question, illustrating the company’s relationships with its customer and suppliers. The graphics generated revealed a stunning level of granularity and detail in the above function.

– I C

About IAIP

India Association of Investment Professionals (IAIP), which is established April 2005 and located in Mumbai, is an association of local investment professionals. As one of the 136 CFA Institute member societies, IAIP connects members to a global network of investment professionals. Consisting of portfolio managers, security analysts, investment advisors, and other financial professionals, IAIP promotes ethical and professional standards within the investment industry, facilitates the exchange of information and opinions among people within the local investment community and beyond, and works to further the public’s understanding of the CFA designation and investment industry.
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