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Published on January 20, 2008

In the world of global investing, information is king and you need it in a timely fashion. That is a key message from Dr Supavud Saicheua, 51, managing director and head of research at Phatra Securities.

Supavud, who earned his PhD from the University of Hawaii in 1984, has spent the past 14 years helping fund managers around the world make the best possible investment decisions on Thai equities.

After all these years and having been through the 1997 financial meltdown and, more recently, the 2006 coup, Supavud still loves his highly demanding job as a researcher.

For fund managers, the stakes are often high, as a big decision can either make or break their portfolios. Hence, timely, high quality research is always prized. On some of the worst days for markets in Thailand, such as those prior to or during the 1997 financial crisis and the September 19, 2006 coup, Supavud was working very long hours to help international clients manage their portfolios amid high volatility.

"During those critical times, I remember working from 4.30 in the morning when I usually get up to watch the closing of the US markets on CNBC and Bloomberg until very late at night. "Usually, I would start the day by watching TV to get the big picture. Then, I'd follow up on selected issues by reading research papers from around the world.

"On a given weekday, there'd be 30 to 40 items in my e-mail, so I do a lot of reading on the computer screen to get insight. Then our team would go deeper on issues critical to clients during the day.

"When the markets are highly volatile or during crises, we'd also have to take lots of conference calls with clients in London and New York - working across different time zones - until late in the evening," he said.

Phatra Securities and its researchers are part of the global US-based Merrill Lynch investment-banking network.

Unlike academic research work, which allows the person doing it the luxury of time, when it comes to research papers used by fund managers in global capital-market investing timeliness and accuracy are musts.

In other words, researchers need to satisfy the demanding needs of investment analysts and fund managers - and do so under pressure.

Their satisfaction and dissatisfaction will be reflected in market surveys, which are conducted periodically when clients vote for their favourite research houses.

"Competition is quite fierce as there are 30 to 40 brokers and research houses here [covering Thai stocks and markets]. Everyone needs to compete for the attention of each client since they don't have the time to read all the papers.

"Hence, we all strive to be one of the top three or top five papers on the coverage of big Thai stocks - such as PTT - read by clients or else you don't matter.

"For top quality, we've got to be able to discern which data are relevant and which are not as we need to draw a broad conclusion as early as possible for the benefits of our clients.

"As markets are moved by information, those who have the right information and knowledge first tend to benefit. It's the time value of information.

"But that's a tough business, especially when you have different sources of data and they are in conflict. Generally, we try to draw a conclusion on major political or economic developments for clients when we're around 80 per cent sure.

"If we did not and waited, say, another two days, and such a conclusion became 95 per cent certain, then everyone would already have the same information. That's no value to investors," said Supavud.

In terms of correct forecasting, a good example took place in the second half of 2006, when Phatra Securities suggested in its research that there was now a significant risk of a coup taking place in Thailand - a first among research houses.

Supavud recalled that such a risk was heightened when Privy Council President Prem Tinsulanonda publicly talked about the role of soldiers and compared them to racehorses, while the incumbent government was said to be just a "jockey".

That historic statement was made two-to-three months before the military actually staged the September 19, 2006 coup to overthrow the Thaksin government.

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Nophakhun Limsamarnphun

nop1122@yahoo.com

The Nation