Managing Investor Relations and communications
The IPO/bond offering process will raise interest about the Company in the media and among investors, but over time that will fade unless Investor Relations (IR) maintain the market’s interest. IR’s efforts are key to maintaining and building investors’ confidence and establishing credibility in the market. Sustainable and regular communication and news flow will provide trading liquidity supporting investment activity in the market.
What are the main goals of Investor Relations Professionals?
► To allow the company to attain the best share price that reflects the value of the company
► Representing the company to investors and vice versa
► Providing financial information to investors in a timely and accurate way
► Providing nonfinancial data to support company valuations
► To ensure that the company fulfills its disclosure duties towards the market and its investors, namely CMVM’s and stock exchanges rules
► Presenting investor feedback to company management and the Board
► Building receptive capital markets for future financing at favorable terms
Corporate performance and behavior have been in the public spotlight and are regularly highlighted in the media. In particular with interlinked capital markets, listed companies are incentivized to meet global best practices where active investors have an increasing influence and demand for additional information. Thus, companies with securities admitted to trading need to have in place information disclosure strategies and policies to respond, on a timely manner, to investor’s requests and deal with regulatory requirements, in a fast-moving environment.
Is a skilled IR team on board to manage communications?
The IR function needs to cultivate relationships with the industry and potential investors, which takes strategic planning and proactive effort to build effective relationships. Market outperformers deliver shareholder value by demonstrating effective investor relations and finance function and, most importantly, operational excellence.
Having a strong IR function will help:
► Sustain the market’s interest in the company
► Communicate with shareholders and the public
► Attract a pipeline of new investors and sell-side research coverage
► Manage regulatory and liability risk
Having this competency is a fundamental element of being a publicly listed company.