76% say Eurozone key driver in market confidence; 35% say new regulations will reduce liquidity; CEOs spending more time to retain existing shareholders
NEW YORK, December 17, 2012 — Companies say that stability of the Eurozone and global systemic market risk, along with the prospect of increased regulatory oversight, are weighing most on their business outlook and on the markets, according to an annual survey conducted by BNY Mellon, the global leader in investment management and investment services.
Eurozone issues are the top concern of firms surveyed in Western Europe, followed closely by those in North America. Latin American companies, however, point to global systemic risk and the sustainability of emerging market growth as their chief worries. In Asia-Pacific, while most of those surveyed consider Eurozone stability important to market confidence, a higher percentage of firms are concerned by currency exchanges rates than in other regions. Regulatory concerns are pervasive; half of respondents are uncertain about how additional regulatory oversight will affect liquidity, with over a third saying it will be negatively impacted.
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 and the issues affecting them. The survey features input from more than 800 companies across 59 countries. Respondents span the range of market cap and industry sectors, including financials, industrials, consumer, technology and healthcare.
"Uncertainty is the underlying theme of this year's survey, so it's no surprise company executives are devoting more of their outreach to retaining current institutional investors," said Christopher M. Kearns, deputy CEO of BNY Mellon's Depositary Receipts business. "Issues like the Eurozone and 'fiscal cliff' continue to weigh heavily on markets globally. In response to these challenges, we're seeing more firms seeking to boost their international shareholders. Depositary receipts remain a key tool for companies in both traditional and emerging markets to source new pools of capital."
Key findings of the survey include:
- Companies are focusing more time and attention on current shareholders, a goal for 27% of firms in 2012, up from 18% in 2011. CEOs are now spending a majority of their investor engagement time (54%) on existing institutional investors.
- After the U.S (67%) and the U.K. (37%), mainland China (27%) and Hong Kong (23%) are considered the most strategic places for stock listings over the next five years.
- Boosting international shareholders has risen as an IR priority, named by 33% globally, up from 20% in 2011 and 17% in 2010. Western Europe (45%) is the most enthusiastic region in pursuing investment outside domestic markets, followed by Eastern Europe/Middle East/Africa (43%).
- Companies continue to increase their focus on sovereign wealth funds as prospective investors; 62% report contacting SWFs in 2012, up from 59% in 2011 and 47% in 2010. Western Europe had the highest rate of engagement (79%), North America the lowest (49%).
- 42% of companies have a formal policy governing social media use, while only 26% actually use social media actively to engage investors. Social media use has risen from 20% in 2011 and only 9% in 2010.
- Contrary to some reports, more companies saw an increase in active management among their top 50 investors in 2012, rather than a decrease. Still, most top 50 shareholders of emerging market firms surveyed are passive investors who gain exposure via index products.
"As global capital markets move into 2013, the imperative for companies to maintain an active, engaged investor relations program has never been greater," said Guy Gresham, head of the Global IR Advisory team in BNY Mellon's DR group. "Our IR specialists continue to work closely with clients in all regions to support and maximize their investor outreach when targeting new investor communities."
This is the eighth 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 2,500 American and global depositary receipt programs, acting in partnership with leading companies from 68 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 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 $27.9 trillion in assets under custody and administration and $1.4 trillion in assets under management, services $11.6 trillion in outstanding debt and processes global payments averaging $1.4 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 or follow us on 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.