Measuring Sentiment

FIND rates news items (and views, too) based on the credibility of the source, then scans each word and identifies a sentiment, and combines the two to generate a colour code ' red, green and grey denoting negative, positive and neutral respectively.
Suprotip Ghosh        Print Edition: April 13, 2014
Co-founders Mukund Mudras (left) and Abhijit Vedak
Co-founders Mukund Mudras (left) and Abhijit Vedak pose at their office in Powai, Mumbai

In November 2010, Som Sagar quit his job at Merrill Lynch Technologies' Mumbai office. The world was just coming out of a financial crisis. Merrill itself, a great Wall Street brokerage at one time and credited with a series of financial innovations, had been sold to Bank of America in January 2009. In India, the BSE Sensex had recovered from its lows in 17,000s in the beginning of the year to 20,000, with a short lick on 21,000 that stood as a record until recently. It was a great time to launch an innovative product aimed at the financial markets.

And that's what Sagar and his Merrill colleagues Abhijit Vedak, Jaison Mathews, and Mukund Mudras, all in their mid-30s then, set out to do. Working out of Sagar's home, they created a company called Heckyl Technologies and developed a prototype of their product. The name Heckyl, says Mudras, Co-founder and CEO of the company, comes from a bird "who can count numbers, differentiate between objects and when time comes, can take complex decisions". An old acquaintance and friend, Rajiv Dalal, lent Rs 50 lakh and, more importantly, a nod of support. From then on, Heckyl's ride has been upward.

Heckyl's business is built on a simple proposition to tackle a complex need. Customers trade on information, and there is too much of it out there. Identifying it, sifting through it, and getting a sense of what a particular news item or expert view means is an enormous task.

NAME: Heckyl Technologies
AREA OF BUSINESS: News analytics and financial information platform
YEAR OF INCORPORATION: 2010
COOL QUOTIENT: Built software that identifi es the sentiment around a stock
The company's product FIND - an analytical platform for investors, traders and researchers - uses a combination of human intervention, computerised language processing and a simple, intuitive display to give users a sense of whether the day's news on a particular stock is positive, negative or neutral, without having to individually read each news feed. A measured snapshot of market sentiment? Yes, that's what it is.

Keshav Samant, Director and Chief Information Officer, Religare  Enterprises Ltd, says this enhances his service. "Immediately you are smarter before the customer," Samant says of Heckyl's solution. "It tells you what the world is saying about your stock or option."

This is how it works. First, the software collects news from various sources. Then the news is rated according to the credibility of the source: better the news source's reputation, higher the rating. Next, it looks for views, which are similarly rated according to the following and credibility of the individual providing the view.

The most credible sources of information are taken to be government agencies such as the Reserve Bank of India or the Securities and Exchange Board of India since they act on (or on behalf of) policy. Companies speaking about themselves through corporate actions announcements are among the most credible too, as are financial statements coming from them. These have high ratings and the least questions asked.

Global media organisations such as Reuters, Dow Jones Newswires, Bloomberg L.P., etc., enjoy high following among global information consumers, and they cover most, if not all important events. Mudras says they have high ratings as well. When Heckyl started, they gave an arbitrary list of sources the better ratings based on this kind of perception. These ratings may have changed since, as the program gives Heckyl the choice to include developments and the ability to add new sources in its ratings system.

The same goes with analysts and market experts. "If a trader such as Rakesh Jhunjhunwala makes a statement or takes a position, the market reacts. That is high credibility for us," says Mudras.

Then, Heckyl's proprietary technology scans through each story of the feed, word by word, finally identifying a sentiment. This is then combined with the ratings of the source to generate a colour code - red, green and grey denoting negative, positive and neutral, respectively.

All this comes together for the customer. On the computer screen, every news feed loads with a number that is contained in a flashing, coloured box. The number denotes the number of sources reporting an event. The colour denotes the sentiment. On the left, there is a grid of stocks or companies, which shows the overall sentiment on each stock through the colour codes. That may keep changing through the day.

The same thing is available for views, in a slightly different way. The customer can search for companies, people or sources.

All this can be seen right there on the client's dashboard, including price movement. This dashboard can be used by traders and investors alike, and no special training is needed. The dashboard is accessible from any computer through a web-based login system, and not any proprietary hardware. According to Religare's Samant, the cost to the client is far lower in comparison with similar terminals used by professional services such as Reuters Terminal or Bloomberg. While the Bloomberg or Reuters Terminal is very popular among professional traders, bankers and the broking community, the core offering of Heckyl is at best a small part of these terminals, says Mudras.

But as Jaideep Arora, Director at Sharekhan, says, in some cases there are just too many news items thrown up for the terminal to be really useful. Sharekhan is currently integrating Heckyl's solution with its own trading platform, and would want to extend the services to its customers. Initially, there were doubts about efficacy and correctness.

Heckyl feels that to increase the credibility of its sources, it has to ensure it gets more and more information directly from the primary sources. Outside of that, 50 sources writing about the same thing is always better than one.

So far, Heckyl has received about Rs 27 crore in funding from IDG Ventures and Seedfund, and Dalal is still invested. Today, the company has gone from the Rs 50 lakh funding from Dalal to revenues of Rs 1.4 crore in 2012/13 and is expecting to grow 300 per cent this year, and from the confines of Sagar's home to a glass office in upscale Powai overlooking a green hillside, with an executive shower-room and an enormous open terrace right outside. Not bad, but the opportunities are much more.

Mudras says that the money they've raised will go into expanding their business abroad. Sagar is in England, and Mathews in Australia, working on clients there. But they still manage to meet at least once a year, in one of these bases for a week. Four days of meetings, and the rest with family. Good sentiment.


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