Scotiabank Halts 37 Stock Reviews as Doumet Brothers Depart

Key Takeaway

• Scotiabank halts coverage of 37 stocks, including Loblaw Cos Ltd. and Gildan Activewear Inc., after analysts George and Michael Doumet exit.
• The departure leaves a gap in Scotiabank's research on consumer and industrial sectors, affecting investor reliance on their analyses.
• Market reactions are mixed; investors may face short-term uncertainty but also opportunities for new research perspectives.

Analysts Exit Scotiabank

The Bank of Nova Scotia, commonly known as Scotiabank, has ceased research coverage of 37 stocks following the departure of two key equity analysts, George and Michael Doumet. The brothers, who were based in the Montreal office, have left the firm, according to sources familiar with the matter. The Toronto-based bank halted coverage of numerous consumer and industrial stocks on May 28, as per data compiled by Bloomberg.

George Doumet had been with Scotiabank since 2007, focusing on Canadian consumer companies, including major players like Loblaw Cos Ltd., the country's largest grocer, and Gildan Activewear Inc., a prominent t-shirt manufacturer. His brother, Michael Doumet, who joined the bank in 2011, was responsible for covering industrial stocks such as Stelco Holdings Inc. and Finning International Inc.

When approached for comments, Scotiabank's spokeswoman Katie Raskina stated, "Scotiabank does not comment on personnel matters." Attempts to reach George and Michael Doumet for comments via email and LinkedIn were unsuccessful.

Impact on Stock Coverage

The sudden departure of the Doumet brothers has led to a significant reduction in Scotiabank's research coverage. The bank stopped covering dozens of consumer and industrial stocks, which could have implications for investors who relied on their analyses. The affected stocks include major companies in the Canadian market, such as Loblaw Cos Ltd., Gildan Activewear Inc., Stelco Holdings Inc., and Finning International Inc.

The exit of these analysts leaves a gap in the bank's research capabilities, particularly in the consumer and industrial sectors. Investors who depended on Scotiabank's insights for these stocks may need to seek alternative sources of analysis and information. The bank has not yet announced any replacements for the Doumet brothers or plans to resume coverage of the dropped stocks.

Market Reactions

The market's reaction to the news has been mixed. While some investors may be concerned about the loss of coverage for key stocks, others might see this as an opportunity to explore different research perspectives. The departure of experienced analysts like George and Michael Doumet could lead to short-term uncertainty for the affected stocks, but it also opens the door for new analysts to bring fresh insights and approaches.

"Scotiabank does not comment on personnel matters," reiterated spokeswoman Katie Raskina, emphasizing the bank's stance on internal changes. The lack of official comments from the Doumet brothers adds to the uncertainty surrounding their departure and its impact on the bank's research division.

Management Quotes

• Katie Raskina, spokeswoman for Scotiabank:

  "Scotiabank does not comment on personnel matters."