ABSTRACT
The investment community, comprising the buy- and sell-sides of the financial market, is arguably the most important stakeholder for a listed company, with the relationship between them having many variations. For large companies, there is an extensive following by analysts. At the other end of the spectrum, small companies struggle to achieve attention. For companies in between, there are gradations across meeting analysts’ insatiable information appetites and marketing to them in an attempt to spark investor interest. Within the sell-side, there is a duality of relationship, often divided by a “Chinese wall”, a self-imposed dividing line within an organization to separate potentially conflicting interests as investment bankers, stockbrokers and analysts vie for corporate relationships. Sell-side analysts need to maintain an objective stance for their research, which is intended to create investing insights for the buy side. Other activities within the same firms are focused on building relationships with listed companies so they can raise capital, advise on mergers and acquisitions and provide corporate finance advice. On the buy-side, analysts and portfolio managers want to build corporate relationships to round out an industry picture as much as they might want to invest in individual stocks.
