Institutional Investor Research Group 2003 The Reuters Institutional Investor Survey 54

Are companies raising capital 50

Important equity attributes 51
Important debt attributes 51
Investment banking &
capital markets
Note: Where no key is present, year-on-year comparative data for buy- and sell-side firms is as follows:
darker-shaded bars represent 2003 data and lighter-shaded bars represent 2002 data.
Buy-side Analysts/Portfolio Managers
Buy-side Traders
Companies
Sell-side Analysts
External Sources
Multiple Sources
For ease of reference, the charts are color-coded to reflect the source of data:
Excerpted from the
Latin America Equities Investment Report 2003
A REUTERS I NSTI TUTI ONAL I NVESTOR RESEARCH PUBLI CATI ON Research Group
Latin America Equities
55 The Reuters Institutional Investor Survey Institutional Investor Research Group 2003
This years investment banking attribute ranking is based
on 21 responding companies. J. P. Morgan dominates the
results, taking first place in all four categories.
A majority of companies, 57 percent, say they are currently
not raising capital. Moreover, these companies do not expect
this to change in the coming year. Company preference for
debt financing has deepened with 86 percent of
respondents expecting it to remain their primary source of
capital compared to last years 77 percent. Equity is increas-
ingly the least favored financing route as investors become
more risk adverse.
Company opinion on investment banking attributes for
equity and debt differ significantly from last year. Coming
off a period when equity IPOs and follow-on stock
offerings were scarce, companies last year ranked
relationship-based attributes most importantnamely
transaction experience in sector and credibility of
investment banking service across all products.
However, their focus seems to have shifted. Companies
are again placing more weight on transaction-based
attributes, with pricing of transaction, underwriting &
distribution capability and execution of transactions
ranked most important.
Investment banking & capital markets
investment banking & capital markets Latin America Equities
Company ranking: investment banking attributes
First
J.P. Morgan
J.P. Morgan
J.P. Morgan
J.P. Morgan
Second
Smith Barney Citigroup
Deutsche Bank Securities
Goldman, Sachs & Co.
Smith Barney Citigroup
Third
UBS Warburg
Merrill Lynch
Smith Barney Citigroup
Goldman, Sachs & Co.
Credibility of investment banking services
Quality of domestic M&A ideas
Quality of nontransactional advisory
Quality of ongoing relationship
How companies spend their time
communicating with investment banks
Decrease
Stay the same
Increase
Advisory: 31.48%
Expected change
Decrease
Stay the same
Increase
Equity financing: 7.48%
Expected change
Decrease
Stay the same
Increase
Debt financing: 61.04%
Expected change
14.29%
60.71%
25.00%
17.39%
82.61%
10.00%
56.67%
33.33%
No
56.76%
57.14%
Yes
Current
Expected
Are companies raising capital?
43.24%
42.86%
Latin America Equities investment banking & capital markets
Institutional Investor Research Group 2003 The Reuters Institutional Investor Survey 56
Debt
Other/Not sure
Convertible bonds
Equity
Means of raising capital
Current Expected
84.21%
8.13%
7.25%
0.42%
85.68%
10.00%
3.41%
0.91%
Important debt attributes
Score*
Pricing of transactions 8.77
Underwriting and distribution capability 8.60
Execution of transactions 8.54
Quality of financial advice on transactions 8.38
Market support after transaction 8.04
Transaction experience in your sector 8.04
Quality of ongoing relationship 7.81
Credibility of investment banking service
across all products 7.65
Quality of nontransactional advisory 6.62
Quality of international M&A ideas 5.86
Quality of domestic M&A ideas 5.82
*Scale of 1 to 10, with 1 being of lowest importance and 10 the highest
Important equity attributes
Score*
Pricing of transactions 9.11
Execution of transactions 8.89
Underwriting and distribution capability 8.89
Credibility of investment banking service
across all products 8.37
Quality of financial advice on transactions 8.32
Transaction experience in your sector 8.21
Market support after transaction 8.16
Quality of ongoing relationship 7.79
Quality of nontransactional advisory 6.89
Quality of international M&A ideas 6.71
Quality of domestic M&A ideas 6.41
*Scale of 1 to 10, with 1 being of lowest importance and 10 the highest
Equity Offerings by Latin American Issuers
01/01/1999-06/23/2003
0
2,000
4,000
6,000
8,000
10,000
12,000
1999 2000 2001 2002 2003
Source: Dealogic
Research Group
Latin America Equities investment banking & capital markets
Institutional Investor Research Group 2003 The Reuters Institutional Investor Survey 57
Research Group
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