Thomson Reuters has extended the analytics offered through its MarketPsych Indices to include individual companies, alongside the indices for countries, currencies, commodities and industries already available.

James Cantarella, Head of Machine Readable News at Thomson Reuters, said the indices cover multiple asset classes and entities, including exposure to African markets.

“In particular, there are indices for individual African countries (133 global countries in all) as well as for currencies, including the South African Rand,” he told Africa Global Funds.

“For the initial launch of indices covering individual companies, there are African companies included, but there will be ongoing additions to the coverage list. Our goal is to eventually match the coverage of Thomson Reuters News Analytics, which provides analytics on over 33,000 global companies, including many from Africa,” he added.

First launched in 2012, Thomson Reuters developed its MarketPsych Indices in conjunction with MarketPsych, a consultancy specializing in quantitative behavioral economics.

The indices provide easy-to-interpret, real-time linguistic and psychological analysis of news and social media, converting qualitative indicators – such as fear, performance forecasts, and trust in management – into quantitative, actionable insight.

The indicators are updated every minute for individual global equities and indices, countries, commodities, and currencies.

“The addition of company-level Thomson Reuters MarketPsych Indices into our news and text analytics proposition extends our ability to help customers understand the behavior driving financial markets,” said Cantarella.

“They act as a powerful complement to the tools and services we already offer in this area, helping our customers draw a comprehensive and sophisticated picture of market dynamics and act with confidence,” he added.

According to Cantarella, their client base is global, covering companies in Asia, Europe and the US.

“Currently the strongest client base comes from the quantitative funds - both asset managers looking at global macro and covering commodities and energy markets, as well as those interested in equities and fixed income. Likewise, large global banks are using the service across investment and risk functions,” he said.

Drawing from a pool of 40,000 primary global news sources and 7,000 social media sites, and covering historical media from 1998 to the present, Thomson Reuters MarketPsych Indices deliver real-time streaming, multi-dimensional sentiment data on more than 7,500 companies, over 180 countries and currencies, as well as other asset classes.

Behavioral economists have long recognized that investor perceptions affect financial markets in predictable ways.

News and social media are increasingly driving investor activity, with many trading decisions based on emotional responses to the stories circulating around particular companies or sectors.

The ability to measure the psychological state of the market as represented by these emotional expressions offers significant advantages in defining effective trading strategies.

Richard Peterson, Managing Director of MarketPsych, said: “Thomson Reuters MarketPsych Indices shed light on how global economies and stock prices respond to information. Through the lens of this data we can distinguish when investors overreact to information – generating price reversals – or under-react to news – precipitating trends.”

“This new data helps investment professionals see how markets behave under stress or during trends, and allows them to systematically enhance investment and trading strategies,” he added.