Credit Suisse hires CLSA analysts to launch China research team

The logo of Swiss bank Credit Suisse is seen at an office building in Zurich's Oerlikon suburb, Switzerland July 27, 2017. REUTERS/Arnd Wiegmann

Credit Suisse Group AG has hired about a dozen analysts from Asian brokerage CLSA for its China Quantitative Insight team to produce data-driven thematic research reports as it expands in the world’s second-largest economy.

The team will be led by David Murphy, who has been with CLSA since 2005, Credit Suisse said in a statement issued on Friday. Others joining the newly created team from CLSA are Haixu Qiu and Lei Chen.

The latest hirings add to an exodus from CLSA which has included CEO Jonathan Slone and Chairman Tang Zhenyi. Tang has been hired by Credit Suisse as its China chief executive.

The team will produce reports in addition to the bank’s research coverage of China-listed firms, said Neil Hosie, Credit Suisse Asia Pacific head of equities, adding the reports will serve hedge funds, institutional and private banking clients.

Investment banks are looking to differentiate their research coverage as fund managers prove less willing to pay for stock-picking research following the 2018 rollout of MiFID II (Markets in Financial Instruments Directive), which unbundled fees.

Before the European Union’s MiFID II, banks and brokerages in Europe bundled the cost of equities research into overall charges for executing customer trades, or gave it away free.

The change has forced some banks to scale back or outsource their coverage of companies.

“Appetite from a client perspective for this kind of thematic report is very large, and the demand goes beyond China given how big an influence China has across sectors globally,” Hosie said.