Market Volatility Causing Shift in Companies' Investor Relations Practices
February 02 2009 - 8:00AM
PR Newswire (US)
Credit concerns prompt change in messaging, increased analyst
communications, according to new survey of various global IR
practices by The Bank of New York Mellon NEW YORK, Feb. 2
/PRNewswire-FirstCall/ -- Companies worldwide are shifting their
investor relations strategies to deal with fallout from the credit
crisis and boosting communications with analysts and investors,
according to an annual survey conducted by The Bank of New York
Mellon (NYSE: BK), the global leader in asset management and
securities servicing. Developed as a benchmarking tool for its
depositary receipt clients, the survey, "Global Trends in Investor
Relations," was conducted by The Bank of New York Mellon in
cooperation with the U.S. National Investor Relations Institute
(NIRI). Results were based on input from 270 companies across 42
countries, the highest response rate since the survey began in
2004. It looks at how publicly traded companies are managing IR
practices in the current economic climate, including investor
outreach, communications and disclosure, approaches to the
sell-side, and staffing issues. "As in past surveys, this year's
findings show the importance that issuers attach to their investor
relations programs, both in their home markets and abroad," said
Michael Cole-Fontayn, chief executive officer of The Bank of New
York Mellon's Depositary Receipt Division. "While there is a
positive correlation between a company's size and its IR practices,
in light of recent events in the capital markets, companies appear
to have a regional bias to communications, regardless of their
market cap." Key findings of the survey include: -- 90% of all
respondents have maintained or increased communications with
analysts and investors due to financial market volatility in the
last 18 months -- The most frequent shift in IR messaging prompted
by analyst questions was related to credit concerns (66%), followed
by outlook horizon (50%) and cost-cutting (50%) -- North American
firms (73%) showed the highest tendency to shift IR messaging based
on credit concerns, followed by Western Europe (70%). Asia-Pacific
companies (54%) were the least likely to have shifted messaging on
this issue -- 70% of respondents in Latin America and 69% in
Asia-Pacific target "sustainability" (i.e., investment decisions
based on environmental and social factors) investors and/or
sell-side analysts as part of their overall IR strategy, compared
to 36% of companies in North America -- 89% of companies
proactively meet with hedge funds, though 27% of respondents said
they did not know, or lacked enough information to judge, the
quality of hedge fund managers they met through brokers. 21% said
that brokers introduce them to too many small funds or to
aggressive/high-turnover funds -- Financial companies led all
sectors in increasing their communications (67%) and were the most
likely to have changed their outlook horizons due to recent market
uncertainty (65%) -- Only half of the financial sector companies
that took part in the survey have a written crisis communications
policy in place, compared to nearly two-thirds of the energy firms.
Respondents in Western Europe (52%) and North America (46%) are
most likely to have written crisis communications policies,
compared to 40% of companies in Latin America, Asia Pacific and
EEMEA (Eastern Europe/Middle East/Africa) "This year's survey
provides valuable insights into how issuers allocate their
resources and communicate with investors and analysts in light of
the current market," said Guy Gresham, New York head of the Global
IR Advisory Team in the bank's Depositary Receipt Division.
"There's clear optimism in terms of investor outreach opportunities
in 2009. We look forward to helping issuers capitalize on this and
gain greater visibility within the international marketplace." The
full survey report is available online at
http://www.bnymellon.com/dr. The Bank of New York Mellon acts as
depositary for more than 1,300 sponsored American and global
depositary receipt programs, acting in partnership with leading
companies from 63 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. Additional information is
available at http://www.bnymellon.com/dr. The Bank of New York
Mellon Corporation is a global financial services company focused
on helping clients manage and service their financial assets,
operating in 34 countries and serving more than 100 markets. The
company is a leading provider of financial services for
institutions, corporations and high net-worth individuals,
providing superior asset management and wealth management, asset
servicing, issuer services, clearing services and treasury services
through a worldwide client-focused team. It has $20.2 trillion in
assets under custody and administration, $928 billion in assets
under management and services more than $11 trillion in outstanding
debt. Additional information is available at
http://www.bnymellon.com/. This release is for informational
purposes only. The Bank of New York 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. DATASOURCE: The
Bank of New York Mellon Corporation CONTACT: Joe Ailinger,
+1-617-722-7571, , or Dori Flanagan, 1-212-815-2291, , both of The
Bank of New York Mellon Corporation Web Site:
http://www.bnymellon.com/
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