Merrill Lynch Employs Most Top-Ranked Australian Analysts 9/25/98 0:21

Merrill Lynch Employs Most Top-Ranked Australian Analysts

Sydney, Sept. 25 (Bloomberg) -- Merrill Lynch & Co.'s Australian unit has the most top-ranked analysts, two years after it expanded its business through an acquisition, a report says.

The report by Sydney consultancy firm Coles Christie & Associates found Merrill Lynch had five of the top analysts in 30 areas, followed by Credit Suisse First Boston and Travelers Group Inc. unit Salomon Smith Barney with four each.

"The major American corporate finance houses have enormous attracting power for analysts, they are globally recognized to be experts in this area and they find it easier to attract analysts,'' said Coles Christie Managing Director John Coles.

"They offer a tremendous advantage for the analysts' careers because their profile is boosted and their remuneration expectations can be met.''

The rankings, set after discussions with broker clients, are important to the security firms because top analysts help attract trading from fund managers and advisory work from companies and governments.

Merrill Lynch expanded into Australia in late 1996, acquiring Melbourne-based McIntosh Securities Ltd. for A$117 million. This year it launched a television and newspaper advertising campaign in an attempt to increase retail market share.

According to the report, the top analyst in the high- profile telecommunications industry is Merrill Lynch's Patrick Russell, as is Broken Hill Proprietary Co. analyst Elaine Prior. The other top analysts at Merrill Lynch follow food and household goods stocks, base metals and transport.

The firm, though, hasn't yet been able to match the success of its analysts in share turnover and is ranked fourth by sales, with 8.5 percent of the market.

Top Trader

Warburg Dillon Read is Australia's top share trader on figures over the past 12 months, followed by Deutsche Bank and Salomon Smith Barney.

Only one of Salomon Smith Barney's top-ranked analysts directly researches companies, Giselle Roux on retail stocks, while the others cover commodities, quantitative analysis and strategy.

Under new Asia Pacific Chief Executive Trevor Rowe, the Travelers unit is looking to establish a retail broking business in Australia, possibly through acquisition. This follows its purchase of County Securities, an institutional broker, in February for A$130 million.

Credit Suisse First Boston, owned by Zurich's Credit Suisse Group, also bought the 75 percent of local stockbroking firm First Pacific Stockbrokers that it didn't own in May.

Its top-rated analysts are led by Nick Selvaratnam on insurance stocks. The others cover alcohol and tobacco, paper companies and developers and contractors.

On an overall ranking of broking services, which includes research and dealing, Coles Christie ranks Salomon Smith Barney first, then private firm J.B. Were & Son, Ord Minnett, half owned by Hong Kong's Jardine Fleming Group, and Merrill Lynch.

The Melbourne-based J.B. Were & Co. is ranked only 7th by top-rated analysts, equal with BT Alex.Brown, owned by Bankers Trust Corp.

ANZ Securities and Prudential-Bache Securities (Australia), being sold to Bank Nationale de Paris, had one top-rated analyst each.

--Aaron Patrick in the Sydney newsroom (612) 9777-8601 pja