More Related Content Similar to An Understanding Of Financial Communications And Investor Relations (20) An Understanding Of Financial Communications And Investor Relations1. AN UNDERSTANDING
OF
FINANCIAL COMMUNICATIONS &
INVESTOR RELATIONS
BY JAIDEEP SHERGILL
CEO & HEAD FINANCIAL COMMUNICATIONS ASIA
Feb 2012
©2011 06.29.2010 | P1
2. INDEX
Financial Communications – An Understanding
Asia Offering
PR for Financial Firms- Listed Corporates, IPO & M&A, BFSI
Investor Relations
Your Role In Financial Communication
Case Studies
©2011
©2011
4. Financial Communications – An Understanding
Financial
Communication
PR - Financial PR – Listed PR – Financial
Firms Corporates Deals
Banks Corporate Earnings Equity Capital Markets
Insurance Corporate Governance IPO/ FPO/Rights
Mutual Funds Statutory Compliance Debt Capital Markets
Non Banking Financial Disclosure Policy NCD/FCD/Bonds
Companies Transaction
Investor Relations
Broking Firms Communications-M&A
©2011
5. Financial communications- Asia Offering
Transaction Communications Investor Relations /
Corporate Communications Disclosure
and Positioning
• M&A – friendly and
• Integrated programs, including: contested, international and • IPOs and other listings
• Media relations domestic • Complex disclosures
• Thought leadership programs • Divestitures / spinoffs • Quarterly and annual reporting
• Investor relations • Recapitalizations • Roadshow presentations
• Internal programs • Post-acquisition / integration • Financial community
• Government affairs programs intelligence
• IPOs & other listings • Investor targeting
Private Equity / Hedge Special Situations and
Funds Corporate Governance Crisis Communications
• Proxy contests • Crisis communications
• Strategic positioning for
• Shareholder activism • Litigation support
alternative investment firms
• CEO succession planning • Regulatory matters
• Media relations
• Board accountability • Bankruptcies / restructurings
• Transaction support
• Portfolio company support • Investigations
• Senior Executive changes
• Product recalls
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7. PR For Financial Firms – How It Is Different
Requires in-depth understanding of the Company, its Business and the environment
it operates in
Differentiated Audiences require specialized information
Customers are investors and not consumers
Regulated business environment (Regulatory/Government Bodies)
Regular update of information required with continuous changing Business
environment
Financial crisis & Scams- Create a turbulent market of uncertainty (Impacts the
company‟s overall Growth Story & Fund Raising capabilities)
©2011
8. Telling a Financial Story To The Stakeholders Who Will Validate It
- Listed Corporates
How can the stakeholders validate the financial information?
Analysis
• Financial statements & Results How is it possible?
• Management forecast
• Key performance indicators
Supply of Financial
Information
Timely…Qualitative…Adequate…Reliable…Accurate…Indicative
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9. PR For Financial Firms – How It Is Different?
Mutual Funds & Equity Traded Funds
Understanding of Regulatory & Communication Guidelines differs
from each country.
Philosophy of Fund Managers and Mutual Fund Companies.
Value Investor : Looks for stocks with potential long term growth
Growth Investing- Buy low and sell high
Blend investing – Is a combination of the above two
Aggressive growth Investing – High Risk, High return
Momentum Investing – Catch a good script and ride the wave to exist with a medium to good return
Peer Group & Media trends mapping & products – Its about building
the brand.
ETF are the next big funds as they are investing in Gold and give
excellent return
©2011
10. Transaction Communications- IPO & M&A
Need timely communication at the time of deal.
Knowledge of regulation governing an IPO or M&A is important and is regulated by
securities regulator, the China Securities Regulatory Commission (CSRC).
Communication needs to be in line with regulators and approved by lawyers as is a
practice all over the world ie IPO listing on LSE or in China
Fresh issue of equity / debt requires communications to attract investors – we
need to tell a story on why we are raising funds, growth of industry and our plans
in order to make the story attractive
Mergers & Acquisitions, Price - Earnings, Venture Capital deals need planned &
strategic communications
Valuation of the business & company is the key communication here
In Touch : Investment Bankers, Corporate Lawyers, Corporates who are
your clients, Consultant Firms; i.e. Ernst &
Young, PWC, KPMG, Deloitte Touche Tohmatsu , Boston Consulting Group.
Every Region will have top 4 names.
©2011
11. Communication for BFSI Sector
Banking & Financial
Services Insurance
Business Segmentation
Commercial Banks: Life & General
Government
Banks
Private Banks
MNC Banks Insurance
Capital Market Banking Advisory
Wealth Management Underwriting
FOREX Management Re-insurance
Asset Management
Retail Banking
Hedge Fund Management
Institutional Banking
Investment Banking Stock Broking –
Intermediary
Private Equity Funds
Venture Capital Funds
Angel Investment
Financial Litigation
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12. Communication Imperatives
Key Triggers for Communication Needs for BFSI:
Fast growing sector – Reach beyond urban markets, semi-urban & rural as well
Expanded service basket amid fierce competition
Product & services differentiation – Key positioning required
Geographical challenges – product & service distribution
Mass-scale consumer orientation required on real-time basis
Growing dependence on facilitators including communication counsel
Complex compliance requirements & adherence to regulatory framework
Communication Areas
Need to leverage these areas
New products, services & geographical expansion
Product distribution
Product innovation
Operational flexibility – Peer comparison
Infrastructure capabilities
Financial reporting & regulatory compliance – Assets/Liabilities Quality, Governance, etc
Communication: Strengthening Business Relationships & Quality of Services
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14. Why Do Corporates Need Investor Relations?
Investor relations (IR) is a set of activities which relate to the ways in which a company
discloses information required for regulatory compliance and good investment judgment to
bond and/or shareholders and the wider financial markets.
To appropriately convey performance to shareholders &
keep co-owners informed
To support corporate positioning
Clear communication helps to secure fair valuation &
market company‟s stock
To build corporate reputation, trust and credibility
To create information level playing field
To unlock Value
Good corporate citizenship
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15. What Does It Consists Of?
INVESTOR
RELATIONS
Securities Communica
Law tions
Compliance
Finance Marketing
Investor Relations enables the most effective two-way communication between a
company, the financial community and other constituencies, which ultimately contribute
to a company's securities achieving fair valuation.
©2011
16. Components Of Investor Relations
Consistent proactive communication
Quarterly result updates / press release
Important corporate developments
Choice of appropriate outreach tool
Analyst meet Vs conference call
Facility visit
One-to-one meetings
Regular feedback
Constant touch with investing community
©2011
17. Important Criteria For Investor Relations
Consistency & transparency of Investor Relations
Understanding of Markets & Valuation
Business knowledge / insights from team
Quality of one-on-one meetings / conferences
Quality of service from Investor Relations team
©2011
18. Business Knowledge / Insights From IR Team
Understand the Company, Industry
Products and Services you bring to the Market
Markets you compete in
Demand drivers, market opportunity
Growth characteristics, operating metrics, segment profitability
Keep track of latest developments in the Company
©2011
19. Activities Under Investor Relations
Concalls
One-on-One Meeting It is essential to communicate the investor
Most analysts prefer having a direct community during quarter/annual results of
update from the company‟s top the company. Through this, the company can
management. This helps them to address the current and future plans and
understand the company better and can achievements of the company. It is the most
also come up with research reports. preferred mode as it is economical, easy to
access and can be reached to a large number
of people in a short time frame.
Bridge-Building Meeting Analyst Meeting
It is advisable to conduct these meetings as it Through this, the management of the
provides an opportunity to introduce your company can interact with the entire
company to various financial institutions and research analyst community in a span of
advisories. This also helps in establishing three hours. However, it is always
strong relationships with the target groups. advisable to conduct these meetings
once a year as the costing for these
meetings is generally high.
©2011
20. Quarterly Result Planning
Preferably Early Within 15 minutes
in the day of conclusion on
board meeting
Audit Comm. Intimation to Uploading results
Meeting stock exchanges on the website
Board Meeting
before 12 noon Media Briefing Analyst
Briefing
One-to-one Select briefing Concall Analyst
meet
©2011
22. Target Audience
Sell-side Analysts : Analysts who sells equity ideas mainly from
Stock Broking Houses & Investment Banks
Buy-side Analysts: Analysts who supports fund managers from
Various Funds; PEs, Etc..
Fund Managers: manages different portfolios of funds
Portfolio Managers: individual portfolio managers mainly
provides by PCG/HNI segments of broking houses and
investment banks.
Financial Media : media reporting about financial performances
and businesses.
©2011
23. Sell-Side Analysts - Motivation
Sector specialists with Institutions like Asset Management companies
Research prominent companies within the sector with an objective to
make a recommendations
Recommendations could be – Buy, Sell, Hold, Outperform, under-
perform, market performer, overweight, underweight
Motivation is to identify stocks which have potential to go up further
Essentially a cost centre, exist to generate higher broking income
©2011
24. Dealing With Sell-Side Analysts
Our Objective
Help them make correct assessment about revenue and profitability
Create consensus about strategy and future outlook
Gain positive endorsement
Receive feedback
How do we deal with them?
Educate about the sector
Educate about the company
Help them make correct assumptions
Remove wrong notions
Continuous update
Do not provide opinion on their projected numbers
©2011
25. How Do They Work?
Spend lot of time with the company
Understand growth triggers and value drivers
Make assumptions
Ultimately interested in projecting EPS for the next two years (Net Income
– Dividends divided by Average outstanding shares)
Use different valuations techniques and justify recommendation
Finally what matters….?
All the sell-side analysts have positive recommendations
No major discrepancies in their estimates, recommendations
©2011
26. Some Of The Top Institutions In APAC Region
Today‟s financial marketplace is dominated by institutional investors, particularly
the new breed of professional investor represented by hedge funds (proprietary
investment partnerships). Consequently, increasing institutional ownership can be
one of the most important catalysts to sustainable share price appreciation.
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27. Summary Of Attributes Valued By Investors
Valued by
Steps we can take
Media/Investors/Analysts
Better qualitative and quantitative disclosure
Transparency
standards in Annual Reports / Financial Statements
Timeliness of Be the first one to deliver the news “Good” or
Communication “Bad”
Frequency of Regular Analyst Meets / Conference calls post
Communication results announcements.
Management Credibility Create track record of corporate governance
Articulate your differentiation vis- a- vis local and
Strategy
global competition
Encourage research analysts to print research on
Availability of research
the company.
Don‟t prepare perfect answers. Perfect answers
Ability to face “What if” may not be the right answer.
questions Demonstrate awareness and willingness to deal
with the situation
27 ©2011
29. Establishing Financial Communication Processes
Establishing calendar of events
Identifying spokespersons for different constituencies i.e. media, analysts, fund managers
Work on key messages
Establishing Standard Operating Procedures (SOP)
Create a mechanism for responding to media & investor queries
Keeping messaging consistent over time and across spokespersons
Establishing a Disclosure Policy
Create mailing list of buy-side and sell-side analysts
Enhancing / updating corporate website for better investor interface
©2011
30. Quality Of Service expected from
Financial Communication Team
Domain Knowledge ie. Banking, Non Banking, Insurance, Mutual Funds,
Equity Markets/ Financial Markets & listed companies and their sector
ie Steel, Wind Energy, Power etc
Investor Relations function must demonstrate integrity, leadership and
ownership
Be Accessible and provide access to Management based on knowledge
Place a high priority on response time
Anticipate issues, be prepared to respond to current events
Keep expectations balanced
©2011
31. Key To Success In Financial Communication
Your Commitment & involvement – Be see as an advisor
Consistent and credible - communications
Clearly articulated, credible business strategies
Open discussion of financial results / expectations
Regular contact with client & financial community ie.
Investment Bankers, Research Analyst, Influencers, Brokers.
©2011
33. Seoul International Financial Hub
Service Period: March 2009 ~ December 2010
Client: Seoul Metropolitan Government (Invest Promotion Division)
Objective: To position the City of Seoul as Asia‟s next Financial Center and
help increase investment attractiveness of its financial industry among
international investors
Activities:
The Banker (2009)
– Established new English information kits and distributed to financial leaders
and professionals (direct marketing)
– Produced creative promotional video, which shown at international
conferences/roadshows
– Uploaded the video clip on YouTube and created linked banner ads at
FT.com, WSJ.com, Economist.com and BBC.co.uk
– Created and sent E-Newsletter „Seoul Finance Premium
Quarterly‟, including vision of SFC, contribution of a foreign CEO in
Seoul, to 500 local & overseas financiers
– Arranged speaking opportunities at large financial seminars to secure
opportunities for on-site promotion of Seoul City
– Co-planned and provided on-site support for Seoul‟s overseas investment
roadshows held in Hong Kong, Singapore, and London
– Generated positive coverage on SIFC both in domestic/international media
Results:
− Seoul ranked the world‟s 16th most competitive financial city by the 9th
Global Financial Centres Index
− Promotional video clip won Grand Prize at Korea Digital Media Award and
Gold Winner at 2010/2011 International MERCURY Awards
- Awarded the Gold Prize in PR Awards hosted by Korea Association of
Advertising & Public Relations
©2011
34. Citigroup Global Markets Korea Securities
(CGMK)
Service Period: Feb 2008 ~ Mar 2010
Client: Citigroup Global Markets Korea Securities
Objectives: Build CGMK‟s corporate profile as a leading player in
the Korean ELW and structured financial products market
Activities
- Media campaign for CGMK‟s ELW business launch in Korea
- Strategic media relationship programs, including roundtable
<Feature article> “CGMK Enters into
Domestic ELW Market”
and educational workshop
22 Feb 2008, Maeil Business Newspaper - Speaking opportunity arrangement in industry-relevant
conference
- Publicity – by-lined articles, press releases, interviews
Results
- Helped the company‟s successful news business launch and
settlement in Korea through well-organized publicity
initiatives and promotional activities targeting investors
<Interview> “You should be prepared in
order to invest in ELWs with high leverage”
<Contributed Column> "Take advantage 20 Mar 2009, Maeil Business Newspaper
of derivatives as investment option”
19 Apr 2010, Hankyung Business
©2011
35. Western Union Money Transfer®
Strategy & Implementation
Strategy for rural India to educate the masses as well as
increasing recall for the brand Western Union Money
Transfer® through road shows, support for local events,
community development initiatives, etc
Constant media updates on new alliances of Western Union
that contributed to increasing network of Agent Locations
Created local marketing activities supported by localized PR
in rural markets for different states:
Rural Olympics in Punjab
Ajmet Urs – Rajasthan
Deva Shariff – Lucknow
Support for Tibet settlements, among others…
©2011
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36. Bharati AXA Life Insurance
Our Mandate
Highlight the synergies between Bharti & Axa and thereby build a
strong platform for the launch of the Company
Popularize Bharti Axa Life Insurance‟s corporate launch campaigns
Position Bharti Axa Life Insurance as “A revolutionary in the life
insurance space”
Project their spokespeople as industry thought leaders
Situation
Presence of a dominant public sector player… “LIC”
Media clutter (in terms of brand messaging)
Maintain a respectable „Share of Voice‟ in category media spends
and industry stories…(Especially being a new entrant in the market)
Strategy
Promote Bharti Axa Life‟s dignitaries
Establish MD&CEO as a thought leader in the Insurance space
Develop the second rung of spokes people from the senior
management team as corporate spokespeople
Adopt senior journalists to establish Bharti Axa Life in the market as
one of the leading private insurance player in the nation
Increase Bharti Axa Life‟s visibility in Tier II &III cities
Initiate Non Media Activities
©2011
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37. Piramal – Vodafone Deal
Program
Highlighting the importance of the deal
and showcasing the entrepreneurial
mindset of Mr. Ajay Piramal among the
stakeholders. To provide a humungous
Business platform considering the size of the deals
Standard which was split in two separate tranches.
CNBC TV18
Key Challenges
Handling the entirety of the deal and
Hindu strategizing it in two separate events
Business
Line
Building a sustained interest from the
media as well as the shareholders
towards the second part of the deal
The Creating a stronger content than the first
Economic Financial part of the deal in order to keep the
Times Express importance of the deal
ET Now
Results
An overwhelming response with a
positive outlook by the media
Wires, Publications, Electronic
Channels lining-up to grab the first-cut
on the deal
Every known business media house
carried the coverage extensively
DNA Acknowledgements on the strategic
Mint move by Mr. Piramal poured in from
Money
various financial experts
©2011
38. Fortis Healthcare – Fortis International Deal
Program
Furthering to Fortis Healthcare‟s
acquisition spree rumors, it was essential
to attract the key media to cover the
news exclusively. Known for their
entrepreneurial successes, the promoters
had to be brought in the fore front of the
media to address the stakeholders on the
positive developments surrounding the
deal.
Hindu Key Challenges
Financial
The Business Rumors about a negative deal making
Express rounds among the media
Economic Hindustan Line
The Singh Brothers reluctance to
Times Times address the media
Results
Exclusive interactions covered by
Reuters and other key Financials in
India
News covered across Mainlines, Wires,
Financials, Electronic Channels,
Regional Media etc.
Wide spread response from across the
Business shareholders and Financial Community
Indian
Standard Express
©2011
39. Binani Industries – 3B Deal
Program
Sensitize Binani‟s 3B – The Fiberglass
Company acquisition by projecting the same
on an international arena. Leverage the
acquisition to foster Binani Industries‟
positioning in the corporate league.
Generate sound bytes to the news and
project the Group as a global conglomerate
The in offing.
Economic
Key Challenges
Times
A pre-cursor news was already in the
Kerala public domain
Bhushanam Attracting international media to the news
in European markets
Building a strong content to make the
announcement newsworthy for national &
international media
Business Execution of the news considering the
Bhaskar different time-zones across the globe
Hindu
Business Results
Line
Countering the odd time of the release
Activation of media interest on a larger
scale at odd hours – 10 biggest
publications of India responding positively
Business
Break-through in TOI, ET, BS, HBL, DNA as
Standard
lead news
News covered by all Electronic Channels
during Prime Time
Journalists queuing up with ‘interactions’
requests
Financial Times of News covered by all Mainlines, Financials,
Chronicle India Regional, Electronic Channels, Wires
nationally and internationally
©2011
40. National Highway Authority of India
Program
Hanmer MSL was given the mandate to
create awareness among retail and
The Hindu institutional investors about the 1000 cr.
Business Line public issue of Tax Free Secured
The Economic
Times
Redeemable Non Convertible Bonds in
Kolkata and Bengaluru.
Key Challenges
Volatile market conditions
The Times of Very short notice to the media and
India broking houses to attend the conference
The Financial Results
Express
• All leading media houses in print,
electronic, wires and onlines including
The Economic Times, Business Standard,
Deccan Herald Hindustan Times, Dainik Jagaran, Vijay
Karnataka, Bloomberg, PTI etc. attended
the conferences across Bangalore and
Kolkata
• The Economic Times carried the news
about the NHAI issue as a banner
headline in all its editions across the
country, highlighting the high – quality of
Business Standard media relations that HANMER MSL
Dainik Jagaran
possesses
• The bonds issue was oversubscribed three
times
©2011
41. Muthoot Finance
Program
Hanmer MSL was given the mandate to create
awareness about the 600 cr. public issue of
The Economic Times secured, redeemable, non-convertible debentures
(“NCDs”) to open on December 22, 2011 across 10
cities
Key Challenges
ET NOW
Volatile market conditions
Very short notice for the media to attend the
Business Standard- conference
Smart Investor
Divya Story featured in certain publications and
Bhaskar websites much ahead of the conference
Results
Hindustan
All leading media houses in print, electronic,
wires and onlines including The Economic Times,
Business Standard, Hindustan Times, ET NOW,
NDTV Profit Dainik Jagran, Malayala Manorama, etc
attended the conference and covered the news
The Hindu in all ten cities .
Business Line Press release disseminated in Tier II towns
Malayala Manorama received coverage in most leading publication
Most Publication mentioned the NCD issue as a
profitable investible option
©2011
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