UBS Warburg won a landslide at the City's version of the Oscars, emerging as the best European broker in the annual Extel awards by one of the widest margins in the survey's history. But the ceremony was overshadowed by a game of audience participation that revealed the City's big brains disagree about where the markets are heading, and believe the London Stock Exchange is set to lose its independence.
The annual awards' 80 categories cover the whole brokerage and fund management industries, although it is the individual analyst rankings that attract most interest. A so-called Extel rating has the power to add a handful of zeros to an analyst's annual salary, as "star" analysts tend to attract corporate advisory work to the banks that employ them.
Some 599 fund managers cast votes over the past two months, during which time many analysts have done their utmost to impress their clients. "It's funny seeing analysts lunching fund managers around the time of the Extel awards," said one guest yesterday. "There are better analysts who often don't seem to get the vote. But at the end of the day it's the vote that raises your salary."
A frenzy of movement in the rankings of individual analysts and sector teams saw only three top 10 entries in these categories last year reappearing in 2001. Unsurprisingly, the main casualties were in the technology, media and telecoms (TMT) sectors, including Nick Bertolotti, JP Morgan's star media analyst, and Deutsche Bank's software and information technology hardware teams.
The top awards went to analysts covering Old Economy sectors. Thomas Brodin, an expert on paper and packaging companies, won the coveted best analyst trophy, proving his entry at number three last year was no fluke. "The Old Economy was out of favour in the first quarter of last year, but interest has really taken off. I give advice straight to investors, that's my style of doing research. It's about client contact," he said.
He rejected suggestions the Extel awards are won on the back of client lunches. "I have the smallest wine and dine account in the firm. I never do dinners and have a couple of lunches a year," he said.
After presenting Mr Brodin's award, Barbara Cassani, the chief executive of low-cost airline Go, offered moral support to the analyst community, under fire this year for its failure to publish more "sell" recommendations. "The markets are so volatile right now that it's a bit hard to blame analysts."
Caroline Randall, a utilities analyst at JP Morgan Chase was voted leading "rising star". She put her success down to making controversial calls on stocks such as a buy recommendation on National Grid and a "sell" on Scottish Power. "There aren't many TMT analysts that have shone this year," she said. "My recommendations have gone the right way and we've broken away from the noise by analysing the parts of companies that others gloss over."
She postponed celebrations yesterday until well after the market had closed, as she would be sipping champagne at a National Grid investor meeting in the evening anyway.
UBS's energy and utilities teams took the top two slots in the sector category, helping the bank win leading brokerage firm for equity research. John Chester, UBS's head of European research, said fund managers had chosen to reward those banks regarded as having truly independent research, but cautioned: "It's hard to stay number one."
Christian Cowley and Phillip Oakley, the ABN Amro analysts behind the negative research note that ejected Railtrack from the FTSE 100, failed to obtain recognition. By contrast, Merrill Lynch's property team, whose research was recently slated by British Land boss John Ritblat, won in their category. It was otherwise a bad year for Merrill Lynch, falling from first to third place in the leading brokerage category, and slipping further in the fund management award, this year won by Fidelity Investments.
The ceremony, at the Guildhall in the City of London, had none of the razzmatazz presentations about the New Economy put on by the hosts, Thomson Financial, last year. Instead, Michael Grade warmed up the crowd by engaging them in a Who Wants to be a Millionaire style audience vote on where the FTSE would be in a years' time. It turned out to be a £1m question: the audience, including many of the City's finest brains, voted in almost equal measure for the four 500-point trading ranges between 5,000 and 7,000.
"I wouldn't bother going back to your offices. I'd just hang around here," quipped Mr Grade. The crowd loved it.
In the same game, only 8 per cent of the audience said the LSE would remain independent. Almost 35 per cent saw it falling to a takeover, while partnering with a European rival, while 58 per cent reckoned it would partner with a European rival.
Michael Spencer, the chief executive of Garban InterCapital, used his stint in presenting an award to comment on the result. "The future for the LSE is to look for projects in Europe, and I wholly support Clara Furse [its chief executive]," he said.Reuse content