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US Institutional Brokers Back In Action After Sandy; Somewhat Optimistic About Election

TIM Ideas Update on Institutional Broker Sentiment, November 2, 2012

US institutional brokers immediately snapped back their production of stock trading ideas when the US markets opened for trading after being closed due to Hurricane Sandy. Idea volume was in the 2000-3000 daily range on Monday and Tuesday, but on Wednesday and Thursday it doubled to the 4000-5000 daily range, which is somewhat above average.

Idea sentiment remained moderately bullish. To date this quarter, 62% of all ideas have been long. On Wednesday and Thursday, ideas averaged 64% long. A long percentage of 66% or more is considered bullish as equity sales desks are recommending two longs for every short trade.

Since brokers have generally been in this 60%-plus range since the beginning of October, it would appear the outcome of the US presidential race, or the US and European fiscal and economic situations, don't pose any immediate threat to their outlook. During the last election, long ideas averaged a moderately bearish 59% in October 2008, slightly more bearish than during the month of September 2008, when the stock market was hit by the failure of Lehman Brothers.

About the Data

The data is based on recommendations sent by equity sales desks, at more than 750 brokerages globally, to their clients at more than 250 hedge and quant funds and traditional long-only institutional investors. TIM Group compiles this data through its TIM Ideas platform, which enables institutional brokerage firms to develop and distribute trade ideas based on clients' investment styles.

About TIM Ideas

For the buy-side, TIM Ideas increases transparency by tracking the relative performance of each idea, increases accountability by aligning commission allocation with the value created by brokerage firms, and reduces "noise" by putting all ideas from a funds' brokers on one platform so they can be sorted, filtered, and analysed efficiently. For the sell-side, TIM Ideas enables the generation of commissions by capturing intellectual property-based services used in the brokerage process in addition to traditional research. For both the sell-side and the buy-side, TIM Ideas enhances compliance by creating an auditable history for each idea.

About TIM Group

TIM Group provides alpha-generating information technology to the financial services industry. The company's focus is on helping buy-side and sell-side firms and administrators maximize their intellectual property to generate more revenue. TIM Group is employee owned with venture capital investors that include Commonwealth Capital Ventures of Boston, GrandBanks Capital of Boston, and JLA Ventures of Toronto. Please visit TIM Group's website at timgroup.com.

Contact

Michael Shallo, Anreder & Co., at +1 (212) 532 3232 or michael.shallo@anreder.com