After having worked as an Investment Analyst for large institutions for 12 years, Shamil Ismail – who was voted the 2014 ABSIP (Association of Black Securities and Investment Professionals) Analyst of the Year – founded Primaresearch in late 2015 as an independent, sell-side, equity research firm based in Cape Town. Since then, Primaresearch has grown to six analysts, and developed a reputation for crafting innovative and insightful research which combines traditional fundamental analysis with industry insights. Primaresearch was voted First in the Innovative Research category of the 2017 Financial Mail Analyst Rankings.
Offering some insight from inside the industry, Ismail explains that the investment sector can be broadly split into two parts – the “buy side” (fund managers) and the “sell side” (stockbrokers). “In recent years, the stockbroking sector has faced multiple challenges, including margin compression, growth in a low-touch, low commission, and more stringent regulations which will ultimately split research and dealing costs.”
Added to these challenges, Ismail says there is growing pressure on South African fund managers to increase their brokerage allocations to black-owned stock broking firms. “So while revenue for the overall brokerage market is under pressure, there is a segment of the market that is growing – the black-owned stockbroker segment.
“There are only a handful of black-owned stock broking firms in South Africa and not all of these brokers have a strong research product offering at present. This is the opportunity that Primaresearch has tapped into: To provide high-quality, niche research by a firm that is owned and majority staffed by black analysts.”
Ismail adds that the business focuses its research on consumer-facing companies. “We have developed a reputation as the ‘go-to’ specialists in the niche of consumer companies and, over the past 18 months, have built a formidable client base which includes all the major asset managers in South Africa, as well as four foreign fund managers.”
In a short space of time, Primaresearch has managed to redefine what sell-side investment research could be. “We have identified a niche, and tapped into the opportunity, with plans in place to grow further in the future. These plans include the launch of ‘PrimaPlatform’, which allows independent analysts to plug into our portal, and service the investment community.”
Shamil Ismail is a finalist in the 2017 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS. For more information on his business, please visit the Primaresearch website: primaresearch.co.za.