This Analyst Uses 80s Rock Classics to Write About Oil StocksBy
Laban Yu seeks to stand out in sell-side research world
Equity analysts face greater challenges in post-MiFID era
Over in the securities industry, analysts are trying anything they can to stand out from the crowd.
Take Laban Yu of Jefferies Group LLC in Hong Kong, who has written recent reports with titles including “Livin’ on a Prayer,” “This Thing Called Love I Just Can’t Handle It,” and "I Just Can’t Get Enough.”
The catch? They’re about Chinese oil, gas and coal companies.
While Yu is clearly amusing himself -- and his readers -- by invoking Bon Jovi and Queen to make serious points about PetroChina Co. and China Shenhua Energy Co., there’s also method to this frivolity. The goal, the 43-year-old Cornell University graduate said, is to make the reports impossible to ignore in a world of shrinking budgets for equity research and information overload from the internet.
“It started as a joke,” Yu said in an interview. “Then I found out it’s a bottomless pit. I could do this forever. And it gets to the point where, if you have a good title, the note writes itself.”
Yu’s Livin’ on a Prayer note, for example, was about how the top Chinese coal companies posted strong earnings on the back of a government-supported coal price, and how he believed the policy had reversed. He turned to Depeche Mode -- I Just Can’t Get Enough -- to commentate on supply and demand in the natural gas market.
Yu, who was voted the most popular energy analyst in Asia for three years running in the Asiamoney Brokers Poll after he started at Jefferies in 2011, has good reason to want to differentiate himself. Spending in the $5 billion investment research industry is estimated to fall on average by as much as 30 percent due to the European Union’s revised Markets in Financial Instruments Directive, according to management consultancy Oliver Wyman.
It’s perhaps not surprising that Yu, who’s now head of Asia oil and gas research at Jefferies, is doing things differently from his peers. Born in China and raised in the U.S., Yu didn’t take the standard path to becoming an analyst. Instead, he studied mechanical engineering and international relations before setting off to spend two years in Cameroon with the Peace Corps, and helping to run a startup in China that later failed.
Sometimes, Yu said, he searches for lyrics to describe a situation. Others, he starts with the artist he wants to use. But every now and again, “I hear some song title and think, that’s exactly what’s happening to PetroChina,” he said.