It's incredible to think that in this day and age, when there is so much focus on corporate transparency, companies still sideline analysts (and sometimes journalists) because they don't like what they write. Shareholders are increasingly conscious about what and how much they are being told by companies they have invested in. So when OCBC Bank decided to omit one analyst in particular from its invitations list for its forthcoming earnings announcement November 6, it is not only at odds with current trends. It actually says more about the company than anything negative the analyst could ever have written.

The story revolves around Matthew Wilson, who has apparently been less than complimentary in his research reports about OCBC. The Edge Singapore carries the full story in its "Edgewise" column titled "OCBC snubs Morgan Stanley analyst" in the October 29 issue. It reports that Wilson upset senior executives with his critical views on OCBC's regional expansion plans, and its endowment mortgages. In turn, they decided to leave him off the invitations list.

The Edge quotes OCBC's Head of Corporate Communications Koh Ching Ching as saying "We have not banned anyone in any way. Whether we invite any particular investor, analyst, fund manager or journalist to any of our various briefing events is at our discretion." (Aha. So, what would happen if Wilson was to show up anyway? Would he be admitted?) Koh goes on to say that the results and presentation slides, as well as the webcast, are free to access by anyone.

That may well be true, and I don't profess to have any indepth knowledge about the company's thinking. But they didn't accuse Wilson of being rude or obnoxious. Just that his reports contained "inaccuracies" (reported by The Edge). So let's take The Edge's headline "OCBC snubs Morgan Stanley analyst" and the contents of the story at face value. This is the sort of headline and story most companies would work hard to avoid. Assuming the story is accurate, it raises four critical points:

1. Criticism not welcome. OCBC's actions indicate the company does not tolerate alternative viewpoints. Which is an irony, given that there is already a wide variety of viewpoints, as shown by the fact that there are five Buy recommendations, seven Outperforms, six Holds and one Underperform call (source: Reuters). So, when will investors be "uninvited" from Annual General Meetings, because management doesn't like their questions or comments?

2. Analysts are critical to communications. Many companies clamour for analyst coverage because of the status is bestows, and the liquidity in its shares in generates. That's why the SGX-MAS Research Incentive Scheme was even created. Clearly, OCBC is spoilt by the fact that at least 19 analysts cover the stock, and doesn't think leaving out the Morgan Stanley analyst matters. But surely they must understand the damage this does to their reputation by snubbing one. He is still a "critical communicator", more so because he is with a global financial institution, not a Singapore-only broker. One cannot imagine Wilson will be more complimentary of OCBC and tell his clients globally how wonderful OCBC is, as a result of being left off the invite list. Is this really what OCBC hoped to achieve?

3. Getting personal achieves nothing. CEO David Conner doesn't like it when journalists get personal in their questioning. Yet senior management seems to be getting personal with one analyst. Play the ball, not the man! If anything, Wilson should be the first analyst OCBC invites, to influence his reports. Or as The Edge concluded, "you cannot reshape opinion if the messenger is not around". No wonder OCBC didn't win any awards at the recent Investors' Choice Awards.

(Story continues after the poll)




I find the growing arrogance at OCBC quite disturbing. One wonders whether other analysts attending the November 6 briefing will ask OCBC management why Wilson is not there. Then OCBC will have lost control over the issue. Remember six or seven years ago, when Business Times journalist Christopher Tan was apparently banned from ComfortDelGro briefings because he criticised the CEO's growing pay package at a time when diesel subsidies for cabbies were being cut? ComfortDelGro backed down.

It's time OCBC did, too.


Mark Laudi

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Labels: analyst, Matthew Wilson, OCBC, The Edge