Research coverage has always been critical to an informed market. Over 76% of investors say they rely on analyst research more any other information source – even more than the annual reports.

Moreover, without sufficient first class research fund managers cannot reassure the regulatory authorities that they have conducted proper due diligence before investing, and they will not invest.

This has REAL market effects

Without analyst coverage, the market price of a stock is often significantly below its intrinsic value and frequently below the relative value of its analyst-covered peers. Trading volumes are low, and the higher bid-ask spreads make trading in the stock expensive for those who do invest.
Making capital more expensive for under followed companies
The unfortunate result for a quoted company is higher costs of capital, fewer opportunities to raise funds for expansion or acquisitions and a low rating that can even leave it vulnerable to takeover.

And the situation is becoming worse

With the traditional means for encouraging research coverage declining, more and more companies are facing the prospect of having limited analyst coverage. With less than 3% of all UK stockbroking commissions generated by companies capitalised below £300m, smaller quoted companies simply do not generate enough commissions to fund adequate research coverage.

The Sponsored Research solution

Objective Capital allows companies to take control of this situation. Our programme of research coverage ensures that high quality, objective corporate research is always freely available to a company’s current and potential investors.

Sponsoring research on your own company is also the way of the future and a global trend. Former SEC Chairman Arthur Levitt told Bloomberg that an alternative to traditional research would be the “development of independent research boutiques that sell their research to the very firms they are researching in the same way that the rating agencies, such as Standard & Poor’s, sell their ratings services”. This is exactly the service that Objective Capital provides.

An essential tool to inform the market

Objective Capital offers an essential tool for ensuring that the market is always full informed about your company. Prepared to the highest professional standards, our institutional-quality research is trusted by investors to provide an objective assessment in the language they understand and value – research.