China’s Analyst Contest Was Halted by Scandal. Now It’s Preparing to Restart
China’s Analyst Contest Was Halted by Scandal. Now It’s Preparing to Restart
(Bloomberg) -- China’s biggest research competition -- halted more than a year ago after a video of analysts partying raucously with a client went viral -- is set to restart as soon as the end of 2019, according to people with knowledge of the matter.
Some analysts have already begun to prepare for the contest though an official date has yet to be announced, according to the people, who asked not to be identified because the matter isn’t yet public.
New Fortune and seven other publishers of rankings signed a self-discipline agreement this month with the Securities Association of China, according to the trade group. Organizers pledged to ban vote-soliciting activities unrelated to research and permanently expel from the competition any analyst caught paying bribes in exchange for support, the association said in a notice posted on its website.
For China’s sell-side analysts, the competition has long had an outsized influence, with compensation levels at many brokerages closely linked to the results. While ordinary analysts with five years of experience earned the equivalent of about $75,000 a year, someone with a New Fortune ranking could make $1 million or more. Last year’s crackdown dovetailed with China’s attempts to stamp out unsavory behavior in the finance industry, including billions of yuan in fines for market manipulation and the arrests of executives for corruption and economic crimes.
A representative for the association couldn’t be reached immediately for comment. New Fortune didn’t immediately respond to an email seeking comment.
Last year’s competition, a hyper-competitive version of the Institutional Investor research poll that started in 2003, was suspended after 30 securities firms including Guotai Junan Securities Co. and Haitong Securities Co. responded to pressure from authorities by pulling out.
The New Fortune contest, hosted by a state-run magazine of the same name, pits researchers against their peers in more than 30 categories, including banks and automakers. Hundreds of money managers vote to determine the winners, and analysts go to extreme lengths to earn a top ranking. Last year’s viral video raised questions about how analysts behaved to win votes.
--With assistance from Ling Zeng, Lucille Liu and Jing Zhao.
To contact Bloomberg News staff for this story: Evelyn Yu in Shanghai at yyu263@bloomberg.net;Zheng Li in Shanghai at zli698@bloomberg.net;Tongjian Dong in Shanghai at tdong28@bloomberg.net
To contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, Daniel Taub, Sam Mamudi
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With assistance from Bloomberg