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Tuesday, 26 January 2010
Small firms told: Focus on investor relations
Smaller firms aiming to grow their businesses will need cash-rich backers, so adopting sound investor relations (IR) practices can mean the difference between success and failure.
Keeping investors in the know can mean difference between success and failure
By Jonathan Kwok 11 December 2009
Smaller firms aiming to grow their businesses will need cash-rich backers, so adopting sound investor relations (IR) practices can mean the difference between success and failure.
The advice came yesterday from Singapore Exchange chief executive Magnus Bocker, who also outlined the type of processes that such companies should incorporate.
These include being transparent with stakeholders, as well as providing quick and consistent responses to investor queries.
Mr. Bocker felt it was critical to ‘help smaller companies get back on the investor radar screen and stay there’, in the wake of the economic downturn. He was speaking at a conference that preceded IR Magazine’s annual awards ceremony.
Bigger firms also need to have effective IR strategies, he said. He cited a recent study on investor perceptions that showed Asean did not figure highly in global portfolios.
Yet, huge sums have poured into emerging markets this year - one study puts the figure at US$63.1 billion (S$88 billion).
‘A tremendous opportunity beckons for Asian companies seeking capital,’ said Mr. Bocker.
The point was underscored by Mr. Joseph Chia, the general manager of the Investor Relations Professionals Association of Singapore.
Small-cap companies do not get much coverage from fund managers and analysts, but he felt they could try options such as strategic placements.
‘Don’t just place out shares to the general public,’ he said. ‘If you can get the likes of, say, Aberdeen, to take up a strategic stake, then other funds will start getting interested too.’
He also advised firms to reach out to potential investors through cost-effective avenues such as websites.
Cambridge Industrial Trust Management chief Chris Calvert said small companies should make every effort to retain investors who have placed their trust in them.
‘You can never over-communicate your story to them,’ he stressed. ‘It is important to keep people fully in the picture.’
Mr. Steve Kelly, the global head of Extel Surveys at Thomson Reuters, agreed that bosses needed to do more. ‘I think companies to some extent still feel they have to worry about doing investor relations only during the week they produce their results.
‘But the market wants companies to be in contact much more frequently than that, and investors are much more receptive to bad news from companies that have consistently engaged them.’
Extel Surveys worked with IR Magazine to identify the award winners. They were chosen after a poll of 150 fund managers and about 200 investment analysts in Singapore.
SingTel won for best overall investor relations among firms with a market capitalisation of more than US$2 billion, while Chartered Semiconductor came out tops in the category for small- and mid-cap companies.
Both firms organise conference calls and meetings on the same day they release their quarterly results, and members of their senior management make a point of meeting investors at conferences and roadshows.
For instance, SingTel chief Chua Sock Koong, senior management and the IR team met more than 800 investors in the course of over 300 meetings during the last financial year.
Ms. Chua also took the award for best investor relations by a chief executive officer.
Other winners included Singapore Press Holdings for ‘best investor relations for a corporate transaction’. One fund manager praised the firm for ‘putting extraordinary effort and thought into calls and briefings’.
1 comment:
Small firms told: Focus on investor relations
Keeping investors in the know can mean difference between success and failure
By Jonathan Kwok
11 December 2009
Smaller firms aiming to grow their businesses will need cash-rich backers, so adopting sound investor relations (IR) practices can mean the difference between success and failure.
The advice came yesterday from Singapore Exchange chief executive Magnus Bocker, who also outlined the type of processes that such companies should incorporate.
These include being transparent with stakeholders, as well as providing quick and consistent responses to investor queries.
Mr. Bocker felt it was critical to ‘help smaller companies get back on the investor radar screen and stay there’, in the wake of the economic downturn. He was speaking at a conference that preceded IR Magazine’s annual awards ceremony.
Bigger firms also need to have effective IR strategies, he said. He cited a recent study on investor perceptions that showed Asean did not figure highly in global portfolios.
Yet, huge sums have poured into emerging markets this year - one study puts the figure at US$63.1 billion (S$88 billion).
‘A tremendous opportunity beckons for Asian companies seeking capital,’ said Mr. Bocker.
The point was underscored by Mr. Joseph Chia, the general manager of the Investor Relations Professionals Association of Singapore.
Small-cap companies do not get much coverage from fund managers and analysts, but he felt they could try options such as strategic placements.
‘Don’t just place out shares to the general public,’ he said. ‘If you can get the likes of, say, Aberdeen, to take up a strategic stake, then other funds will start getting interested too.’
He also advised firms to reach out to potential investors through cost-effective avenues such as websites.
Cambridge Industrial Trust Management chief Chris Calvert said small companies should make every effort to retain investors who have placed their trust in them.
‘You can never over-communicate your story to them,’ he stressed. ‘It is important to keep people fully in the picture.’
Mr. Steve Kelly, the global head of Extel Surveys at Thomson Reuters, agreed that bosses needed to do more. ‘I think companies to some extent still feel they have to worry about doing investor relations only during the week they produce their results.
‘But the market wants companies to be in contact much more frequently than that, and investors are much more receptive to bad news from companies that have consistently engaged them.’
Extel Surveys worked with IR Magazine to identify the award winners. They were chosen after a poll of 150 fund managers and about 200 investment analysts in Singapore.
SingTel won for best overall investor relations among firms with a market capitalisation of more than US$2 billion, while Chartered Semiconductor came out tops in the category for small- and mid-cap companies.
Both firms organise conference calls and meetings on the same day they release their quarterly results, and members of their senior management make a point of meeting investors at conferences and roadshows.
For instance, SingTel chief Chua Sock Koong, senior management and the IR team met more than 800 investors in the course of over 300 meetings during the last financial year.
Ms. Chua also took the award for best investor relations by a chief executive officer.
Other winners included Singapore Press Holdings for ‘best investor relations for a corporate transaction’. One fund manager praised the firm for ‘putting extraordinary effort and thought into calls and briefings’.
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