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The 2014 All-Asia Research Team: Banks, No. 1: Anil Agarwal & team
Anil Agarwaland his Morgan Stanley teammates vault from third place to deliver the firm’s first top finish on this lineup since 2004, before Agarwal assumed a leadership role. Working in countries throughout the region — Australia, Hong Kong, India, Indonesia, South Korea and Singapore — these 12 analysts monitor some 100 banking companies, impressing investors with reporting that is “grounded in disciplined fundamental research,” as one fund manager says. Asia’s bank shares posted a gain of just 1 percent over the 12 months through late April, while the broader regional market climbed 3.8 percent, and the researchers project that the trend will continue. “We expect Asian bank stocks to remain weak in 2014,” says Agarwal, 39. “This is driven by continued economic slowdown across Asia and relatively tight liquidity across Asian markets.” He and his colleagues do, however, see promise in select names and have been recommending that investors favor banks in India and South Korea over their regional peers. The economy in India has stabilized, and interest rates there are likely to fall, they advise. In South Korea banks have already been forced to deleverage. On this theme the squad in February 2013 began touting Industrial Bank of Korea, which provides financial services to small and medium-size companies; and in November urged clients to buy Axis Bank, India’s third-largest private sector bank, by assets. As of late April, IBK’s stock had climbed 5.1 percent, to 12,550 won, in line with the sector’s performance; and Axis had bolted 34.8 percent, to 1,534.45 rupees, while the region’s banking stocks overall were flat. Agarwal, 39, earned an MBA from the Indian Institute of Management, Calcutta, and joined Morgan Stanley in 2001, after working at a commercial bank as a foreign exchange trader. He made his first appearance as a co-leader of this crew in 2009. “Anil has an excellent ability to pick stocks based on his many years of experience,” observes another booster. “He is willing to make clear nonconsensus calls, such as his recent upgrade of Indian banks.” |
