Role of Equity Research in Capital Market

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Role of an Equity Research in capital market

Companies constantly produce large amounts of information regarding their financial status, their success in business markets and their current investments. Much of this information is required for legal purposes, but it also provides necessary data for the stock market. Most investors do not have the time or resources to follow this massive amount of company information. Equity research analysts work to compile this data, along with relevant market information, to provide investors with useful recommendations.


  • In stock market terms, “equity” refers to ownership of a business, which a business can sell as shares to interested investors. An equity research analyst specializes in examining what shares are for sale, what shares are selling well and what companies appear to be growing and will be worthwhile investments. Equity research analysts also track which stocks are falling so they can point out trends and provide useful information to brokers and investors.

Capital Market Research

Capital market research is an essential activity for companies because it enables them to provide products and services that are useful for the targeted consumers. Such a focused and logical approach enhances the profit making possibilities of companies.
The companies can earn more dividends and at the same time minimize risks as a result of research on capital markets. One big advantage of capital market research is establishment of proper communication between the companies and the customers. The customer reactions to various services provided by the companies can be measured as a result of capital market research.

The companies can thus do away with wrong policies and look to take the right steps. The companies can also locate the right opportunities through market research. If the company undertakes capital market research before launching a new product or service then it stands a better chance of getting a good return. Risk minimization is another reason for undertaking capital market research.
Through this research, the exact needs of the market and the general public can be gauged and the products and services can be made very demand oriented.
The companies can also analyze whether they are making progress in the right direction.Capital market research should be done as early as possible in order to avoid problems in the future. Before investing in the stock market, capital market research needs to be undertaken. Research involves finding the companies and stock prices that would best suit the financial situation of the investor. The company profile needs to be studied and the size of the company is another important parameter of stock market investment research.

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