Ohm Research & Owlin – A Practical Example of How to Make the Most Out of Emerging Market Opportunities
A multi-billion market for innovation and start-ups; a self-reinventing financial market system; a booming engineering and tech talent pool; an improving healthcare system; a flourishing insurance market – these aren’t from an investment leaflet about an EU country. These are some of the 20+ opportunities that McKinsey defined for Brazil in a recent report.
We deep-dive in the topic of emerging markets alongside one of our clients – Roberto Attuch, CEO and Founder of OHM Research. With over 25 years of buy- and sell-side experience and a solid background managing or setting up the Latin America-focused equity research divisions of Credit Suisse and Barclays, Roberto is the go-to person to talk with to get a grasp of emerging market investing.
OHM Research is an electronic research marketplace delivering actionable insights to investors based and interested in emerging markets in Latin America and, more specifically – Brazil. It is composed of over 60 analysts, economists, and strategists based all across the world – from London, Paris, and Moscow to all the major capitals in Latin America and across the US. The diversified team conducts research on all asset classes and macro trends and delivers insights to investors looking to penetrate the Brazilian market. And to do that efficiently, they rely on Owlin.
“We provide our team with the complete infrastructure to work with, a major part of which is Owlin,” says Roberto. “That way, they can have access to all the relevant news about the particular assets they cover,” he adds.
Opportunities and Challenges in Emerging Markets Investing
There is one prevalent principle on a macro and micro level – the lower the base a country or a company starts from, the bigger and more rapid room for success it has.
“At a time when disruption is impacting the world and historic trading relationships are being impacted by geopolitics and technology, Brazil stands out as a country where opportunities for growth appear compelling and there to be seized.”
– Kevin Sneader, Global Managing Partner, McKinsey & Company
The quote above is equally relevant to other emerging markets like Mexico, Chile, Colombia, and other countries in Central and Latin America. What unites all of these markets is their high growth potential and rapid pace of development, attracting interest from a global base of investors.
Estimations point out that emerging markets generate over 40% of the world’s economic output. They are poised to continue outperforming developed countries by a significant margin in the short term.
OHM Research is determined to help investors capitalize on these opportunities. “Our focus and recent partnerships aim at attracting the global focus to Brazil,”reveals Roberto.
But penetrating the Brazilian market often is accompanied by significant challenges. These include lack of transparency, limited media coverage, language barriers, informational asymmetry, and more. Due to them, these markets remain out of sight for global investors.
For example, with developed markets, there is an abundance of information from regulators, official announcements, third-party analysis, and other top-tier sources. When it comes to emerging and intransparent markets, however, investors often face an informational blind spot. High-yield exotic instruments, for example, often are private, traded OTC, or non-listed on lit markets. As such, they are rarely covered by mainstream data vendors.
Furthermore, most actionable insights usually appear first or only in local media in the native language. This barrier prevents from picking up and adequately interpreting critical information.
Even if investors manage to do that, they would also have to address the issue of data relevancy. Alternatively, they should avoid relying on retroactive data like quarterly reports or due diligence analysis as they become “old news” as soon as they are released. Instead, investors should aim at forward-looking insights.
Those interested in emerging markets should also address the issue of excessive noise and inadequate information interpretation. The “informational tsunami” we witness today makes it challenging to adequately source reliable data and cut market noise to ensure adequate sentiment analysis and the correct information interpretation.
Overcoming the Barriers
Overcoming these barriers is now possible thanks to automation. The silver bullet for research teams comes in the form of collaboration with technology service providers like Owlin that help easily identify potential risks or arising opportunities within target industries and markets by granting access to credible, timely, and actionable information.
“To attract investors to Brazil, it is important to rely not only on global analysis but also access to news and insights relevant to the market,” admits Roberto.
This includes gathering news, researching trends, deriving the right insights, accessing in-depth intelligence reports, projecting risks and potential red flags, all of which contribute to a broader and more resilient look over investors’ portfolios. That way, investors can, at any point, maintain close contact with the local market.
However, in the case of LATAM markets, this information is often overshadowed by the media dominance of emerging market countries such as India or China and is absent from leading media as it rarely fits the general audience profile. It is usually hidden into various conventional and unconventional sources.
To overcome this, the OHM Research’s team of analysts aims to go beyond the well-known leading news providers by gathering information from a plethora of sources. Those include specialized reports, websites of NGOs, exchanges, companies, and regulators, government publications, local and regional media, industry newsletters, forums, blogs, and more.
“The combination of our platform and Owlin makes it increasingly easy for clients to access news and insights. For example, we can send them daily updates about topics of interest both globally and in Brazil or tailor specific products,” explains Roberto. “This makes our approach more proactive and helps build better relationships with our clients,” he adds.
Automated adverse news monitoring platforms that embrace the power of AI prove invaluable in bringing down all barriers and ensuring access to actionable intelligence for a comprehensive view of market environments. That way, analysts and investors can take advantage of leading indicators and early-warning signal detection features to timely identify upcoming events and capitalize on arising opportunities.
“The main advantage we have compared to other research shops – both in local banks and also shops that sell research, is that they don’t have the international reach we have,” further adds the CEO of OHM Research.
Besides the globally distributed team of analysts and the international presence of OHM Research, the comprehensive coverage is also attributed to the ability to dig into over 3m publicly available data sources in 12 languages, effectively scraping over 80% of the news world.
“When I was starting OHM Research, I was looking for service providers to partner with, and I couldn’t find any other news engine that works in the way Owlin does.“
– Roberto Attuch, Founder and CEO of OHM Research
The successful collaboration between Owlin and OHM Research is a practical example of how to overcome the challenges and capitalize on the opportunities of emerging markets.
Going forward, OHM Research and Owlin will continue to build upon the fruitful relationship by adding new features and functionalities to improve the service provider’s interaction with clients.
For more information on how we help clients navigate emerging and non-transparent markets, download our dedicated whitepaper.
If you want to experience the Owlin advantage first-hand, don’t hesitate to get in touch with us.