59% of surveyed firms meet with SWFs; 40% strategically targeting investors in emerging markets
NEW YORK, October 25, 2011 — Companies worldwide continue to shift their investor relations strategies to expand outreach to sovereign wealth funds and emerging markets, according to an annual survey conducted by BNY Mellon, the global leader in investment management and investment services.
The study also found nearly three-out-of-four respondents believe mechanisms such as short-selling, 'dark pools' and high-frequency trading negatively impact global trading markets and that more oversight is necessary.
Developed as a benchmarking tool for BNY Mellon's depositary receipt clients, the survey, Global Trends in Investor Relations, looks at how publicly traded companies are managing their IR practices – from guidance and disclosure policies to most popular roadshow destinations. The survey was conducted through July and August 2011 and features input from 650 companies across 53 countries. Respondents cover the range of market cap and sectors, including financials, industrials, consumer, technology and healthcare.
"Companies are adapting to new global market realities and taking a strategic approach to sovereign wealth, as well as growing investor pools from China to India to Brazil, as they seek to better position their firms in higher-growth regions of the world," said Michael Cole-Fontayn, CEO of BNY Mellon's Depositary Receipts business. "We see this trend only strengthening and are developing new products that offer greater visibility and access to the global capital markets for forward-thinking firms."
Key findings of the survey include:
- 59% of all companies meet with sovereign wealth funds, up from 47% in 2010, and an additional 25% would consider meeting with them. By a wide margin, the most frequently engaged wealth funds are based in Singapore, Norway and Abu Dhabi. Western European companies are the most likely to meet (69%) or consider meeting (24%) with SWFs, while North American firms are least likely to engage sovereign wealth funds (42%).
- 40% of companies are actively targeting investors in emerging markets, up from 36% last year. Nearly one-in-five are considering a secondary listing outside their home market. Among these firms, a listing in Hong Kong or China is of strongest interest, followed by Brazil and India. Latin America- (70%) and Asia-Pacific-based (54%) companies report the highest interest in attracting emerging market investors
- 74% of all firms believe additional regulatory oversight is needed for trading mechanisms such as 'dark pools,' short-selling and high-frequency trading. The sentiment is strongest among U.S. companies (89%) versus non-U.S. firms (70%)
- 65% of firms issue corporate social responsibility (CSR) reports, up from 50% a year ago. Nearly twice as many firms in North America (54%) and Asia-Pacific (61%) now do CSR reporting compared to 2010, more in line with companies in Western Europe (84%) and Latin America (68%)
- 92% of all companies meet with hedge funds, largely unchanged from 2010; 21% of a firm's investor meetings are with hedge funds, down from 24% a year ago
- 85% of companies provide financial guidance, especially those in Western Europe (89%) and North America (92%). 71% of firms in the BRIC countries offer such guidance, compared to 89% of companies in non-BRIC emerging markets
- 20% of companies use social media tools to communicate with investors, up from 9% in 2010, but the majority of IR departments remain wary about tools like Twitter and Facebook
"With continued uncertainty in the global markets, it remains critically important for companies to maintain a robust investor relations program and understand how best to focus their efforts," said Guy Gresham, New York head of the Global IR Advisory team in BNY Mellon's DR group. "Our investor relations specialists work closely with clients in every region to support their strategic IR planning and to help maximize their outreach when targeting new investor communities."
This is the seventh annual investor relations survey conducted by BNY Mellon's DR team. The full report is available online at www.bnymellon.com/dr.
BNY Mellon acts as depositary for more than 2,100 American and global depositary receipt programs, acting in partnership with leading companies from 67 countries. With an unrivaled commitment to helping securities issuers succeed in the world's rapidly evolving financial markets, the company delivers the industry's most comprehensive suite of integrated depositary receipt, corporate trust and stock transfer services. Learn more at www.bnymellon.com/dr.
BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $25.9 trillion in assets under custody and administration and $1.2 trillion in assets under management, services $11.7 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Learn more at www.bnymellon.com and through Twitter @bnymellon.
This release is for informational purposes only. BNY Mellon provides no advice nor recommendation or endorsement with respect to any company or securities. Nothing herein shall be deemed to constitute an offer to sell or a solicitation of an offer to buy securities. Depositary Receipts: Not FDIC, State or Federal Agency Insured; May Lose Value; No Bank, State or Federal Agency Guarantee.