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Best Practices for Effective Investor Relations in a Changing World
03 October 2019
Last week, IHS Markit hosted an Investor Relations Upskilling
event in Tokyo, bringing IR practitioners from listed issuers
together with industry leaders from buy-side and sell-side firms to
discuss the current landscape of Investor Relations. We invited
leading experts from each market sectors and took an in-depth look
at the latest market trends and regulatory changes along with best
practices for investor relations in Japan.
The changing dynamics of the sell-side
Hiroki Tanaka from Mizuho Securities provided insights into what
challenges the sell-side is facing, in particular with the impact
of MiFID II on arranging roadshows for Japanese companies. The goal
for investor relations professionals is to figure out a way to
deliver as much relevant information as possible in a timely manner
to the targeted buy-side investors. With MiFID II impacting brokers
and the dynamics of relationships between issuers and investors, IR
practitioners are now standing at the crossroads of significant
changes in the offering of financial data. Issuers engaging
investors directly is going to increasingly be the norm and IR
professionals will be tasked with handling this effectively and
efficiently. Using multiple channels for information to support
this will be critical for success.
ESG is the new sexy
ESG has been, without a doubt, the hottest acronym amongst
market participants for the past few years though very few of us
are sure what it really means to become more 'ESG conscious.'
During the panel discussions with sell-side, buy-side, and issuer,
there was a consensus that Japanese companies need to consider ESG
with changing practices. Many Japanese issuers have mainly focused
on reforming their governance, while giving little attention to
environmental and social aspects of ESG. Advocating efforts to
improve ESG factors to enhance corporate value is a rare occurrence
but demonstrating interest and value in ESG at issuer-led events
and meetings has the power to appeal to potential investors.
Best practices for effective IR
Yoshiki Nagata from Meiji Yasuda Asset Management shared an
interesting look into the mind of the buy-side. Institutional
investors are driven by various kinds of goals and constrained to a
delegated portfolio management style. From the long-only,
long-short, small-cap/large cap; each different mandate requiring
different approaches. This means IR practitioners must carefully
decide on whom to talk to and what to talk about. Additionally,
institutional investors are putting more and more pressure on
engaging in dialogue with C-suite level executives. It has become
one of the key roles for IR practitioners to encourage
communications between investors and company leadership, leading to
stronger relationships.
This fast-changing world demands Investor Relations
practitioners to handle a wide range of information and proactively
make changes. If you are interested in finding out more about the
discussions, please get in touch with
Hidekatsu.Yamamoto@ihsmarkit.com.
IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.