Which issuers and investors will be most affected by the SEC’s proposal to increase the 13F threshold to $3.5B? Dis… https://t.co/UKslPvikv2
Investor and Issuer Engagement in Uncertain Times - Part 4
IHS Markit's Perception Analytics team engages in in-depth discussions with investors and analysts daily. Given recent market volatility and significant economic uncertainty, IHS Markit will be speaking to investors and analysts on a regular basis to assess how the current situation with COVID-19 is impacting their evaluations of and engagement with corporate issuers. Highlights include:
Surprisingly, many investors and analysts agree that
withdrawing guidance may be the most appropriate move for companies
at this time.
"Everyone is cutting guidance at this point, so that is not the end of the world. Investors know that those numbers are not accurate. Scrapping guidance is acceptable."
Unsurprisingly, investors and analysts emphasize that it
is most important for companies to conduct and communicate an
honest assessment of the risk factors facing the business.
"In this case, companies should talk about how things have trended intra-quarter and since the end of the quarter to provide additional guidance on how things have evolved. Some of the more proactive management teams are doing scenario analyses by stress-testing their business models under different scenarios."
Some investors and analysts note that the market will
ultimately reward companies that demonstrate proactiveness and
conservativism on their Q1 earnings calls.
"It is very important for them to be proactive rather than reactive. If their businesses really are resilient, then management teams will have the numbers to back that up."
IHS Markit's Perception team will continue to gather real-time market feedback as the situation unfolds, so please look out for the next part of this series.
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.
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