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Capel ends Warburg's five-year reign

SBC Warburg's five-year tenure as the City's top-rated research house ended yesterday when NatWest Securities clinched the 23rd Extel survey of investment analysts.

James Capel, the broker that dominated the table throughout the 1980s and which is now owned by HSBC, rose from fourth position to just pip SBC Warburg for second spot.

"The result particularly reflects NatWest's foremost position in the UK sectors," said Geoffrey Osmint, consulting editor of the survey which is weighted by the size of funds managed by those institutional investors who voted.

NatWest also walked away with the award for the best sector coverage. This was won for the third year running by its oil team led by Fergus MacLeod who narrowly beat off a strong challenge from the textile and apparel team at BZW, led by Julia Blake.

Mr MacLeod, who also won the best individual analyst's title ahead of HSBC James Capel's engineering specialist Charles Burrows, was notable by his absence at yesterday's London Guildhall lunch, which has become the "Brit Awards" for brokers.

Instead it fell to Mr MacLeod's colleagues, Suzy Mayne and David Atkinson, head of equity research, to accept the award on his behalf from Alistair Darling, Labour's City spokesman. "Fergus is off trekking in Pakistan for a few weeks," Ms Mayne said afterwards "He has just finished a 300- page oil document so he needs some well-deserved rest."

The survey's findings are another blow for SBC Warburg, formed last year after Swiss Bank Corporation paid pounds 800m for SG Warburg's investment banking activities. Since the merger the investment bank has been hit by high-level defections from its corporate finance side which observers say has affected its securities business.

The results also show that UBS leap-frogged three places to take fourth position, ahead of BZW which fell two notches to number five. UBS was helped by more votes for its European research, which is rated second only to SBC Warburg. Merrill Lynch, which includes broker Smith New Court, and Kleinwort Benson, owned by Germany's Dresdner Bank, stayed at number six and seven respectively in the pecking order of stockbroking firms. The awards are often criticised as being an excuse for highly-rated analysts to rack up the telephone number salaries they already command. Last year, for example, NatWest's pharmaceuticals analysts Steve Plag caused a stir among colleagues when he was poached by rivals BZW for significantly more money after being voted best individual analyst. Mr Plag was on gardening leave when this year's poll was being conducted.

But yesterday Extel denied the survey determined the level of analysts' remuneration. "We only report the fund manager's opinions of the quality of analysts' work," Mr Osmint said. "Only those who employ them can gauge their revenue potential. Experience would show there is not necessarily a direct correlation between earnings power and an analyst's ranking."

The 23rd Extel survey

all-sectors league table

'96 '95

1 (2) NatWest Securities

2 (4) HSBC James Capel

3 (1) SBC Warburg

4 (7) UBS Ltd

5 (3) BZW

6 (6) Merrill Lynch (aka Smith New Court)

7 (5) Kleinwort Benson Securities

8 (8) ABN AMRO Hoare Govett

9 (10) Morgan Stanley International 10 (9) Goldman Sachs International