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25 February 2024

Equity research firms to face challenges

By Shveta Pathak

As economies across the world make efforts to combat the financial tumult, equity research firms would face the challenges of dealing with "low probability and high severity" events like this and come out with solutions, said Pat Dorsey, Director Equity Research, Morningstar, an investment research provider in North America, Europe, Australia and Asia.

"Given the events of the past year, you have to think of the unthinkable. I think they would need to expand imagination and consider these low probability but high severity events," said Dorsey, adding, "at the same time they do not have to overestimate what has happened."

The UAE, he said, is a high-potential market, a fast-growing part of the world. "Given the growth potential here, the rise in consumer spending, it is a good destination for fund managers." Research, in such times, would be used all the more as it would help investors gain a clear picture of firms. "Investors need more information at present," he said.