When the Euroland countries opened for business on Jan. 4, and 11 countries began using the euro as their local currency, the historic event changed the way that investment managers need to research and analyze securities in their portfolios. z First, it created a need for market data and corporate and investment research geared specifically for euro-denominated instruments. Secondly, stock pickers will need databases to evaluate Pan-European equities that scan across industries, rather than by country.
Fund and investment managers will need to know what effect the euro will have on the U.S. economy. They'll need to know how the new European Union will affect tourism in the Euroland countries. And they'll need to know what the cross-border implications are for industries doing business in that region. In the fixed-income arena, eurobond databases will be in demand, especially those that examine the credit quality of various government issues. On the horizon will be a burgeoning market for corporate euro bonds, which will create an opportunity for existing database suppliers and new niche entrants.
To help supply this need, market data vendors and a number of investment research providers are adapting their data to offer euro-specific information. Many have released, or plan to soon release, euro-specific services. Reuters, Bloomberg and Bridge have been busy adapting their data feeds to include the euro. Research providers such as Thomson's Investext, OneSource Information Services, Disclosure's Worldscope and Eurobonds Online have services that offer euro-specific research. Other services, such as Zacks Investment Research and Datastream/ICV, offer data and research that incorporates information of interest to those concerned with the Euroland economy.
a growing interest
John McGovern, vice president of business development for Boston-based Investext Group, a subsidiary of Thomson Financial Services, says there's been a growing interest among Investext's clients about the euro and a call for more euro-specific research. While the company does not offer any service that is specifically geared to the euro, Investext, he says, has many reports on euro-based subjects sprinkled throughout the system.
"There are more than 1,000 reports in our system on the euro," says McGovern. "Merrill Lynch has a few euro-specific reports on our system as well."
He says that because Investext's clients expect to find reports on a wide variety of subjects, a service concentrating on the euro would not be practical. "Clients come to us for so many different topics," he says.
Investext has a service called Research Bank Web (www.investext.com) that can be accessed over the Internet and features more than 700 sources of investment, corporate and trade reports. McGovern says that through July alone, the number of euro-specific reports increased on the service from 80 to 130. Research Bank Web essentially is a Web-based version of Investext's Research Bank database, which is available through a CD-ROM workstation.
"The number of reports concerning the euro is increasing all the time," McGovern points out. "The variety of those reports is interesting."
Research Bank Web features reports and analysis on such subjects as the effects of the euro on tourism in Euroland countries, the changing euro equity landscape and the effects of the euro on the global automotive industry.
Overall, the service features reports from 500 investment banks such as Merrill Lynch, ABN Amro and Bear Stearns, 60 market research firms and 150 trade associations. More than 5,000 new reports are added each week. Reports can be purchased on a full report basis or a per-page basis. Typically, the per-page cost is $9.99.
one source, many contributors
Another entrant into the euro field is OneSource Information Services, based in Cambridge, Mass. The Web-based service, which integrates multiple data sources, offers company-based data and research. The company plans to add to its Business Browser product line with a new service called European Business Browser, (www.onesource.com), which is being made available in conjunction with Dun & Bradstreet. OneSource says the service will feature data on over 300,000 companies from 19 European countries.
While OneSource did not develop European Business Browser specifically to concentrate on euro issues, the service does contain plenty of relevant data. Plus, the launch of the service just happens to coincide with the use of the new currency in Euroland countries, though the company admits that is a happy coincidence and that was not planned.
"With European Business Browser, you get a service that offers a single supplier who standardizes the information," explains Nancy Ivory, OneSource's European product manager. "Plus it offers global sources of news such as Reuters and Comtex."
Ivory says European Business Browser - like OneSource's other products - are useful for identifying specific companies in specific industries. The service enables users to drill down into company fundamentals such as executives and their contact numbers and company financials. The service offers up to three years of detailed financials on each company and charts that enable at-a-glance comparisons of companies and industries.
"It's good for targeting companies across Europe," says Ivory. "You can drill down to a particular level and it's all translated into English."
The European Business Browser service covers a range of corporate and industry information on both public and private companies, including company profiles, news, business and trade articles, industry intelligence and financial data. The service integrates textual and numerical information from Dun & Bradstreet with news, trade press articles and market research from Reuters, Comtex, RDS and Snapshots International. Pricing for the service depends on the number of users. For a single user, the service costs $31,000 per year. But for more than 100 users, the cost drops down to about $1,400 per user.
"The service is meant to be used by people who need the data on a daily basis," says Ivory. "It's not just for the library. We encourage larger organizations to roll it out to everyone."