Valuations, marketing and uncertainty: a field study of financial analysts and salespeople

Abstract

Purpose This paper aims to explore how sell-side analysts and salespeople make sense of uncertainty on their market knowledge, valuation and marketing outputs. Design/methodology/approach Data is collected by direct observations of and interviews with analysts and salespeople in the Turkish stock exchange, an emerging market with considerable global fund management activity. Findings Analysts face considerable uncertainty on their market value forecasts but dismiss it as local dynamics not incorporable to valuation practices in global sell-side business. Salespeople, despite paying more attention to such dynamics owing to their sales tasks, limit themselves to analyst output in marketing. Both actors recognise the importance of analyst work to be able to have “a right to speak” in global sell-side business. Research limitations/implications Changing market conditions and regulations since the time of study have been shaping analysts and salespeople work in global sell-side business, for example, the way sell-side is compensated by buy-side, buy-side’s move to receiving sell-side services from fewer brokers and hence shrinking sell-side teams. The paper does not address these. Nonetheless, it shows how valuation and marketing can be two distinct lines of work in sell-side business irrespective of market conditions and raises the question for future research as to how sell-side professionals manage this distinction, and how they make sense of and cope with broad market dynamics beyond sell-side and buy-side relations (e.g. automated trading machines, online retail trading). Originality/value The paper provides rare observation-based insights into analyst and salespeople work, including their sensemaking of uncertainty. It shows the importance of market identities and associated knowledge in valuation and marketing work in sell-side business.