Evolving Investor Relations

Transcription

1 Evolving Investor Relations Jeff Morgan President and CEO National Investor Relations Institute (NIRI) 1

2 National Investor Relations Institute (USA) NIRI was formed in 1969 Located in Washington, DC USA 4,000 members Representing 2,000+ public companies NIRI Board: 2

3 NIRI s Focus: Global IR 1. Information 2. Education 3. Advocacy 4. Community/Networking 3

4 1. Information Online Resources Weekly: IR Weekly e-newsletter Monthly: IR Update magazine Regularly: NIRI Research Regularly: NIRI Practice Advise 4

5 2. Education 12+ Instructor led courses yearly 20+ Online webinars annually 3 day Annual Conference attendees University Relationships NIRI Standards of Practice NIRI Bookstore 5

6 3. Advocacy Washington, DC Regulators (SEC, FASB, etc) International Organization of Securities Commissions (IOSCO) Peer Organizations Global IR Societies GIRN (Global IR Network) CFA Institute Raising IR Profile within the Company 6

7 4. Community/Networking 33 Chapters located throughout the U.S. Social Media groups on LinkedIn Face Book Twitter Topical & Issue Communities Emerging Issues Committee 7

8 Our World is Changing: Financial Markets 8

9 Our World is Changing: Financial Market Trends 1. Exchanges/Bourses 2. Sell-Side: Investment Banking 3. Buy-Side: Institutional Investors 4. Regulations 5. Financial Communications 6. Economic Slowdown 9

10 1. Exchanges/Bourses Global For-Profit Exchanges NASDAQ-OMX NYSE-Euronext Horizontal Expansion Equities, options, futures Vertical Expansion Complete IR services Websites Surveillance And much more 10

11 1. Exchanges/Bourses (continued) Lost Linkage: Listing & Trading Wholesale vs. Retail Separation Darkpools/Alternative Trading Systems Fairness (Best Price) Transparency (Who is trading your stock) 11

12 U.S. Marketshare July, 2009 NYSE Listed NYSE Arca Nasdaq Bats Direct Edge Other Nasdaq Listed Nasdaq Arca Bats Direct Edge Other The markets are fragmented. No market can claim a majority of the trading in its own listings. 12

13 2. Sell-side: Investment Banking Where is the added value? Not research anymore Cost Cutting Research is limited Senior research replaced with junior staff Lost Commissions (Dark pool competition) Direct Market Access, program trading Company elimination/consolidation Lehman Brothers Merrill Lynch Bear Sterns IROs must prioritize, job more difficult 13

14 3. Evolving Buy-Side Hedge Funds Long-term trend: hedge funds growing Research is from within by institutions Some short term, others long-term More cooperation with other funds & firms Pension fund may own a hedge fund More Communication with IR departments Hedge funds no longer feared, are accepted But, no increase in transparency 14

15 3. Evolving Buy Side (continued) Sovereign Funds Growing! Expect an increase Especially from Economies in Asia Oil & gas Relatively unaffected by market Long term, passive investors Investment in projects in own countries Many are following code of conduct International Monetary Fund 15

16 3. Evolving Buy Side (continued) Passive Index Funds Versus active mutual funds Copy index performance Attractive to U.S. investors Difficult for IR Beyond reach of communications Can influence stock price Private Equity Rapid growth before downturn Availability of capital Cyclical business Quiet, but lurking Stay prepared for takeovers Spin off companies as IPO 16

17 4. Regulatory/Governmental Trends Abusive short selling is a global problem Governance & Activism Board Shareholders Say on Pay Corporate Social Responsibility Green movement is a global mandate 17

18 4. Regulatory/Governmental Trends (continued) Transparency & Consistency XBRL Extensible Business Reporting Language U.S. Top 500 countries in 2009, more in 2010 and 2011 IFRS International Financial Reporting Standards Global regulation convergence Rules or a briteline test versus Meaningful principles 18

19 5. Communication Trends Growing importance of web Migration from static to usable data Web is first point for information Contact Financials Communications hub/social media Corporate blogs Investor forums Twitter, FaceBook, LinkedIn 19

20 6. Economic Trends Employment and Layoffs Commodity price fluctuations Global financial downturn Strength/weakness of countries currency Less capital for growth and borrowing 20

21 Evolving Investor Relations So how does IR evolve to meet the changing world and the new financial markets? 21

22 Evolving IR to meet an evolving world 1. Foundation of IR Consistency Credibility Transparency Responsiveness 2. Focus on Buy-side 1 st then Sell-Side 22

23 Evolving IR to meet an evolving world 3. Be aware of market participants Traders (short term) Hedgers (medium term) Investors (long term) 4. Use market access to your advantage Not just for brokers Dark Pool offerings Stand-alone web offerings 23

24 Evolving IR to meet an evolving world 5. Balancing outward communication with intelligence gathering What are investors thinking Is activism coming 6. Know company intimately Income statement Balance sheet (especially in downturn) Debt structures Governance 24

25 Evolving IR to meet an evolving world 7. Reach out and understand all investors/users Traditional institutions Hedge funds Passive investors (index funds) 8. Champion financial communication mediums Traditional print Website information Social networking 25

26 Websites/Internet/Social media Social Media Blogs Chatrooms/company sponsored? Annual online meetings? 26

27 Evolving IR to meet an evolving world 9. IR in challenging financial times Do not hide or cancel meetings Communicate company s value & growth story Monitor stock performance relative to peers Circle around to potential investors you ve contacted in the past couple of years things have changed and they may be interested Make sure employees are communicating and know the company message, as they are some of your best spokespersons 27

28 Evolving IR to meet evolving world REMEMBER: 10. IR is the gatekeeper Proper disclosure Proper transparency In a manner that is: Consistent Credible Responsive 28

29 Open Discussion Questions & Answers 29