Analysts in the research divisions of financial institutions once had many opportunities to appear in the media and served as the public face of their firms — research was once called the “star department”. In recent years, however, the decline in profitability of the secondary market has become pronounced: many European securities firms, including Barclays Securities, Deutsche Securities and Credit Suisse Securities, have withdrawn from Japanese equity research, and consolidation has progressed, as seen in the integration of the research divisions of Mitsubishi UFJ Securities and Morgan Stanley Securities, significantly reducing the number of financial institutions engaged in research.

Along with this, research coverage has become concentrated on large companies while coverage of small- and mid-cap stocks has thinned, making it harder for companies to convey to investors the management strategies they should be communicating. At securities firms, the quality of analysts has declined and the development of the next generation of young analysts has stalled. Having been involved in the capital markets for many years, we feel a strong sense of crisis about this situation.

Meanwhile, in Europe and the United States, independent research firms are gradually gaining ground and penetrating institutional investors with their own business models. We will encourage the transformation of the business model that has existed in the secondary market and, by serving as a bridge between issuers and investors through our various services, take on the difficult challenge of revitalising the capital markets.