January 25, 2016

China and Germany Jump as Perceived Sources of Investment Capital, According to BNY Mellon Investor Relations Survey

Two countries move up as key sources of new investment over the next five years

NEW YORK, Jan. 25, 2016 /PRNewswire/ -- After the United States and the United Kingdom, China and Germany are now rated by companies as the most strategic sources of new investment capital over the next five years, reflecting those countries' growing economic clout, according to BNY Mellon's annual investor relations survey. China moved up from fifth to third place, while Germany surged from seventh to fourth place, overtaking Singapore and Japan's spots in the prior survey.

Companies also continue to increase their outreach to sovereign wealth funds (SWFs), with 65% of respondents engaging with SWFs over the past year, up from 57% in 2013.

Systemic market and political risk remain companies' top two concerns impacting global market confidence. Uncertainty over new regulatory environments dropped in importance from the previous survey, falling from third most important to fifth this year.

Developed as a benchmarking tool for BNY Mellon's depositary receipts (DR) clients, the survey, Global Trends in Investor Relations, looks at how publicly traded companies are managing their IR practices and the issues that affect them. Now in its tenth edition, the 2015 report is based on results from 550 respondents across 54 countries that span the range of market cap and industry sectors, including financials, industrials, consumer, technology and healthcare.

"Global firms continue to expand and enhance their engagement with current shareholders, but we've seen an interesting shift," said Christopher M. Kearns, CEO of BNY Mellon's Depositary Receipts business. "Responses indicate that after a post-crisis period focused almost solely on investors amid intense competition for capital, companies now are devoting more time to other IR activities, such as board member involvement, enhancing senior managers' visibility, and improving relationships with analysts."

Other key findings of the survey include:

  • The percentage of company board members meeting with investors doubled, rising from 24% in the 2013 survey to 49% in 2015. Respondents also report that senior managers are increasingly part of those meetings, with 55% saying senior execs are involved, compared to just 43% in 2013.
  • The five most strategically important countries in the next five years for new sources of investment capital are the U.S. (91%), the U.K. (76%), China (50%), Germany (45%), and Singapore (44%). Japan fell from fourth to sixth place between the 2013 and 2015 surveys.
  • The upward trend in outreach to sovereign wealth funds continues, with 65% of participants reporting engagement with SWFs during the past 12 months, up from 57% in 2013. Norges Bank Investment Management (42%), Government of Singapore Investment Corporation (38%), and Abu Dhabi Investment Authority (30%) remain the top three SWFs engaged with by global companies.
  • IROs conduct 40% more one-on-one investor meetings when their performance is linked to their pay, companies reported.
  • Thirty-percent of companies reported reaching out to socially responsible/ESG investors, up from 26% in 2013. Those that do cite primary reasons are to target long-term investors and to diversify their shareholder base.
  • Since 2010, survey results have shown a continuous decline in outreach to retail investors by CEOs, CFOs and IROs. Data suggests that, given time constraints, companies increasingly focus on institutional investors as a more efficient use of their resources.
  • Only 30% of companies use social media to engage investors. Eastern European firms are most active with 53% using social media, while North America is the least active region with only 24% involved. More than twice as many mega-cap companies (54%) use social media in IR compared to micro-cap firms (26%).

"Global issuers recognize the importance of maintaining an active, engaged investor relations program," said Guy Gresham, head of the Global IR Advisory team in BNY Mellon's DR group. "In developing this survey, we've focused on helping companies identify best practices in investor relations by providing actionable benchmarks. Whether it's meeting the evolving needs of long-term stakeholders or enhancing disclosure, new opportunities are always emerging for global firms to demonstrate leadership."

To see the report, Global Trends in Investor Relations-2015, visit here.

BNY Mellon acts as depositary for more than 2,700 American and global depositary receipt programs as of September 30, 2015. Acting in partnership with leading companies from over 65 countries, BNY Mellon is committed to helping securities issuers access the world's rapidly evolving financial markets and delivers a comprehensive suite of depositary receipt services. Learn more at www.bnymellon.com/dr.

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of Dec. 31, 2015, BNY Mellon had $28.9 trillion in assets under custody and/or administration, and $1.6 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Learn more at www.bnymellon.com/newsroom.

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