Worrying trend of sponsored company analyzes in Europe

He writes wall Street Journal in a column under the wine line "Heard on the Street".

The chronicle indicates that payment analyzes have become increasingly common since the January entry into force of the new EU financial markets regulation, called "Mifid2 regulation". With Mifid2 in place, the stockbroker can not bill its analysis via the chain, but must separate the two parts of the cost.

By 2018, the average number of analysts covering large European companies had decreased and its effect was even more pronounced on the coverage of medium-sized companies. Such changes have not been observed in the US stock market in 2018, a market that does not apply Mifid2 regulation.

"European Midcap Company is already less guarded than its American counterparts. Now investors need to be even more cautious when investing in Europe, "writes WSJ.

It is recalled that the bond market has for a long time acted in the same way as the market of the analysis of the parity of payment which gains ground. WSJ continues: the role played by credit rating agencies in the 2008 financial crisis is also close.

"Overall, the movement is Against the sponsored analysis, a disturbing phenomenon for the stock market, as a less negative surveillance of companies will be disclosed to the public, "said the report.