1 / 22

November 2010

Making financial markets, accounts, corporate finance & valuation accessible to all. November 2010. Best Practice in Investor Relations Palestinian Capital Market Forum 2010. Miranda Lane FinanceTalking Ltd

teagan-gamble
Download Presentation

November 2010

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Making financial markets, accounts, corporate finance & valuation accessible to all November 2010 Best Practice in Investor RelationsPalestinian Capital Market Forum 2010 Miranda Lane FinanceTalking Ltd T: +44 (0)1780 450500F: +44 (0)1780 450505E: info@financetalking.comW: www.financetalking.com

  2. The Big Picture Programme Best Practice Local Issues

  3. Sell side Valuation Buy side Capital Markets Big Picture ABC Co Directors Investment Bank Raising Money Investors Owners

  4. Sell side Valuation Buy side Benefits of Trust Company reputation Personal reputation ABC Co Directors Quality advice Access to capital at lower cost Investment Bank Positive recommendations Raising Money Prepared to allocate capital Investors Owners

  5. Sell side Valuation Buy side If Trust is Lost Reputational damage Reputational damage ABC Co Directors Advisers pull out Negative recommendations Investment Bank Raising Money Less access to capital at higher cost Capital is withdrawn Investors Owners

  6. Sell side Valuation Buy side Regulation & Governance – a Prerequisite ABC Co Directors Financial Regulator Corporate Governance Investment Bank Raising Money Investors Owners

  7. Sell side Valuation Buy side Core Concepts • COMPANY • Highest standards of corporate governance • Full and early disclosure of price-sensitive information • Openness and honesty of management • Sensitivity towards the needs of investors ABC Co Directors Investment Bank Raising Money • MARKET • Equal access for all shareholders to same information • No insider trading or other market abuse • Rules & regulations governing obligations of listed companies Investors Owners

  8. The Big Picture Programme Best Practice Local Issues

  9. Key IR Audiences Investors & Buy-side Analysts Sell-side Analysts

  10. Best Practice – First Steps • Gain management buy-in for IR • Develop your investment story • Establish corporate governance principles • Establish internal controls to protect shareholders’ investment Investors & Buy-side Analysts Sell-side Analysts

  11. Setting Up IR • Have a dedicated IR function • Consider consultancy support • Define your IR objectives • Develop disclosure policy and establish mechanisms for reporting price-sensitive information • Establish a financial reporting calendar • Build relationships with analysts, investors & the financial media • Prepare for likely crises I R

  12. Typical IR Objectives • To achieve a realistic valuation for the company’s shares by making the shares an attractive investment proposition • To preserve a ready market for future capital • To build a broad, diversified shareholder base with an appropriate shareholder mix • To build a liquid but stable trading market • To comply fully with the regulations designed to protect investors • To lower the cost of capital I R

  13. Buy-Side Relations • Know who your investors are • Develop strong personal relationships • Regular roadshows/meetings with management • Hold annual investor days/site visits/R&D updates etc • Participate in investment bank sector conferences • Conduct regular perception studies • Don’t be drawn into selective briefing

  14. Sell Side Relations • Encourage a wide following - a better informed market will attract investors • Offer regular briefings, site visits and updates • Good disclosure on outlook will avoid a wide range of forecasts • Conduct regular perception studies • Don’t be drawn into selective briefing

  15. The Investment Decision Making Process Sector prospects Company prospects Financial analysis Forecast Valuation Investment decision

  16. Key Valuation Variables Sector prospects Company prospects Financial analysis Forecast Valuation Investment decision

  17. Telling Your Story & Influencing Valuation Understand your investor base Clear guidance Help with non-sensitive items Sector prospects Company prospects Financial analysis Forecast Valuation Investment decision Provide industry statistics KPIs to bring market closer to mgt's view Define your sector or peer group • Flag expected changes to trends • Clear communication of expected capital structure • Communicate • Quality • Growth • Risk Clear communication of dividend policy Clear communication of dividend policy

  18. Building Trust • Promise & deliver • Build relationships • Give regular access to senior management • Demonstrate commitment to best corporate governance practices • Benchmark disclosure, presentations & reports against best practices • Keep talking Investors & Buy-side Analysts Sell-side Analysts

  19. The Big Picture Programme Best Practice Local Issues

  20. Sell side Valuation Buy side Local Issues • COMPANY • Control by founders • Liquidity • Size ABC Co Directors Investment Bank Raising Money • MARKET • Lack of data/analysis • Volatility • Other risks (geopolitical, repatriation of capital etc) Investors Owners

  21. Sell side Valuation Buy side Palestine - Attracting Capital • COMPANY • A good growth story, backed up by track record to date • An understanding of risk • Strong management • Best practice corporate governance • Best practice IR • Liquidity • The prospect of returns commensurate with the risks involved • = create trust ABC Co Directors Investment Bank Raising Money • MARKET • Develop data • Develop/attract intermediaries • Develop regulation • Develop corporate governance • = create trust Investors Owners

  22. Making financial markets, accounts, corporate finance & valuation accessible to all November 2010 Best Practice in Investor RelationsPalestinian Capital Market Forum 2010 Miranda Lane FinanceTalking Ltd T: +44 (0)1780 450500F: +44 (0)1780 450505E: info@financetalking.comW: www.financetalking.com

More Related