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Brendan Wood Releases Canadian Equity Research Sales and Trading Performance Report

October 23rd, 2019 by TopGun Press

Brendan Wood Releases Canadian Equity Research Sales and Trading Performance Report

RBC takes the 2019 Research Trophy with Scotia and BMO close behind.

Confidential Closed Circuit Communication
October 24th, 2019

Dear Panel Members & Clients,

Times Have Changed

From here onward we will be producing Brendan Wood’s intelligence on this industry on a North America wide basis. In addition to our traditional performance breakouts, we will generate market share per name covered not just on the 325 Canadian targets but the US as well. This stock by stock market share is far more useful to a dealer firm’s fundamental decisions concerning resource allocation. As we have learned in Canada’s domestic market more than 50% of research coverage is unfortunately wasted due to the decreases in commissions, the dominance of TopGun analysts and the concentration of AUM in the hands of fewer institutions.

Hard work and exceptional coverage diligence paid off for Scotia’s research talent bank again this year. The Scotia research team continues to challenge the longstanding close rivalry between industry leaders BMO and RBC. Scotia finished second.

Canadian investment research, traditionally a competitive business, has been faced with a declining commission revenue pool over the last few years. This intensifies sell-side research competition for the remunerative attention of asset managers, who have fewer commission dollars at their disposal than ever. Even with US demand for local Canadian research, total North American commission payment for Canadian equity research is currently CAD $330M. Within the last decade that figure was more than 50% larger.

This pressure on the institutional commission business has made it tougher on small firms who cannot distribute the cost of investment research across retail advisory and corporate finance platforms which the larger banks can. Boutiques, like Cormark Securities, have tended to focus more energy on the small, mid-cap space, consistent with their corporate coverage targets. Cormark Securities was the 2019 leader in Canadian small cap research. GMP, Raymond James and Canaccord Genuity ranked in the top five research firms in the small cap space.

“The bigger, full-service banks employ exceptional professional analysts dominating the coverage of big cap Canada stocks. Big banks have the budgets and are not missing the opportunity their resources present. Analysts have a vested interest in their own franchises as well as the reputations of the banks they work for. These professionals are working hard covering a more consolidated universe of sizable asset managers. The emphasis is on quality of research product and coverage. This forces the boutiques into smaller cap and selective coverage of the big cap names,” said Jordan Novak, Partner, Brendan Wood International.

Looking at the business as a whole including all commission payments for Research, Sales and Trading, brand firms like BMO and RBC have expanded their franchises in the US. As a result, these firms are more successful in generating commissions from US asset managers who buy Canadian names. The current North American commission universe amounts to about CAD $845M. The full service Canadian banks’ aggregated market share accounts for about 62% of that figure.

According to investors, the top three performing banks in Canada led the industry in overall commission dollars and left a revenue gap between their market share and the remainder of the field. The three leaders, RBC, BMO and Scotia, each earned double-digit market share while closest rivals, CIBC, TD and National Bank Financial, garnered market share in the single digits. National Bank held onto its market share but trails the field of full service banks.


Another issue facing the industry is the increased use of electronic trading. According to investors, 26.4% of Canadian stock commissions were traded electronically and will increase to 31% in three years. RBC Capital Markets registered the top overall quality of trader service. CIBC World Markets generated the highest number of TopGun Trading relationships


Investors report that Scotia Capital delivered the top overall quality of sales service. CIBC World Markets generated the highest share of TopGun Sales relationships. No coincidence that CIBC World Markets and Scotia Capital were ranked the Top 2 firms for providing investment ideas to investors. RBC and BMO were cited as generating the highest quality issuer management visits, according to investors. This is the first year Brendan Wood International segregated management/company meetings in the commission pie. A growing portion of sales coverage commission is allocated for management/company meetings. This latter task is time consuming and issuer demand is hard to keep up with.

The TopGun Canadian Equity Research Analysts in Sector 2019:
(Alphabetical Order by Sector):

Sector #1 TopGun Analyst
Agriculture, Chemicals, Fertilizers Joel Jackson (BMO)
Alternative Energy Rupert Merer (NBF)
Banks Mario Mendonca (TD)
Base Metals & Minerals Orest Wowkodaw (Scotia)
Biotechnology & Pharmaceuticals, Healthcare Doug Miehm (RBC)
Consumer Products & Merchandising Mark Petrie (CIBC)
Diversified Financials Geoff Kwan (RBC)
High Tech (Comm Equip., Semiconductors, Software, Other) Thanos Moschopoulos (BMO)
Industrial Products Maxim Sytchev (NBF)
Insurance Mario Mendonca (TD)
Media (Printing, Publishing, Broadcasting, Advertising & Entertainment) Drew McReynolds (RBC)
Oil & Gas Equipment & Services Jeff Fetterly (Peters)
Oil & Gas – Large Cap Randy Ollenberger (BMO)
Oil & Gas – Small/Mid Cap Ray Kwan (BMO)
Precious Metals & Diamonds – Large Cap Tanya Jakusconek (Scotia)
Precious Metals & Diamonds – Small/Mid Cap Ovais Habib (Scotia)
Pulp, Paper & Forest Products Daryl Swetlishoff (RJ)
Real Estate, REITS & Hospitalities Neil Downey (RBC)
Telecommunications & Wireless Jeff Fan (Scotia)
Transportation Walter Spracklin (RBC)
Utilities Robert Kwan (RBC)
Economics Avery Shenfeld (CIBC)
Index Analysis Mark Steele (BMO)
Portfolio Strategy Martin Roberge (CG)
Quantitative Analysis Mark Deriet (Cormark)
SmCap/SpSits Dimitry Khmelnitsky (Veritas)
Technical Analysis Mark Deriet (COR)

* Analysts may have dropped coverage or moved firms

Copyright© 2019 All Rights Reserved – Reproduction in any form, strictly prohibited

The Top 3 Canadian Sales Professionals Selling Canadian Equities 2019 – Generalist:
(Alphabetical Order by Last Name):

Bannon Kopko – Scotia Capital
Todd Krauser – RBC Capital Markets
Ryan Males – CIBC World Markets

The Top 2 Canadian Sales Professionals Selling Canadian Equities 2019 – Specialist:

(Alphabetical Order by Last Name):

Nathan Normandin – BMO Capital Markets
Bonita To – Scotia Capital

Copyright© 2019 All Rights Reserved – Reproduction in any form, strictly prohibited

The Top 3 Canadian Traders Trading Canadian Equities 2019:
(Alphabetical Order by Last Name):
Ashlim Ameen – RBC Capital Markets
Carlo Giarrusso – BMO Capital Markets
Devin Ramasawmy – BMO Capital Markets

Copyright© 2019 All Rights Reserved – Reproduction in any form, strictly prohibited

About Brendan Wood International:

Brendan Wood International (BWI), formed in 1970, is a private partnership generating independent confidential performance audits throughout the world. Relying on real time intelligence, the firm advises public companies, institutional and activist investors, investment banks and broker dealers on strategy, performance and recruitment of TopGun talent. The firm’s partners have formally presented at 1000+ C level strategy meetings and corporate off sites in fifty cities. Brendan Wood founded the exclusive TopGun Club.

Related Links:


Jordan Novak
Brendan Wood International
+1 416 924 8110

Amanda Knott
Managing Director
Brendan Wood International
+1 416 924 8110

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