What is Investor relations ("IR")?

Often, the only method of communication to investors after an Initial Public Offering (IPO) is the Annual Report and the Annual General Meeting (AGM). However, AGMs have proven to be largely ineffective, mainly due to poor attendance, time constraints, logistical problems and their lack of frequency.

In an age when “instant corporate information” can be transmitted to an international audience via the Internet, Public Listed Companies need to engage with investors on a continuous basis to gain visibility.  As investors have so much choice, Public Listed Companies need an investor relations programme to obtain coverage and support. The investor relations challenge is to secure investors’ interest by delivering information effectively and in a clear and timely manner.

Hence, investor relations is a strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company, the financial community, and other stakeholders, which ultimately contributes to a company’s securities achieving fair valuation.

By providing information and analysis which helps investors develop a well rounded understanding of your company and its strategies, your company can help achieve a fair market valuation for its securities, create a body of investor support and a climate of favourable investor opinion.

 

The Need for Online Investor Relations Website

Why do Public Listed Companies need to have an online investor relations website?

  • Meeting your shareholders' and investors' expectations

Companies are now required to give more information on more aspects of their businesses than ever before, on a timely and effective manner.

Increasingly, investors and analysts conduct their preliminary research via a company's website, so it is crucial that your website contains the right information in the right place, and that it is easy to navigate. It is also vital that the website is updated immediately with all announcements, press releases and new presentation materials given out at briefings for investors, analysts or the media.
  • Increased competition for capital

Companies now operate in a global market and must compete for capital with the best in the world. There are now more and more listed companies in the stock market and investors will need to have information what sets your company apart from the rest before investing their money.
  • Closer contact and relationship with your investors

Other than the AGM which is once a year, does your company have any other mode of communication with your investors? Do shareholders and investors have an avenue to ask for more information on your company? Your investor relations website will be the source of communication and information to your shareholders and investors.
  • Globalisation of shareholder base

Increasingly, companies' shareowner registers reflect an ever more international investor base. International funds are now more active in buying shares from developing countries and cross border trading will become more popular in future. Hence there is a need for fundamental information to be published to attract investors.
  • 24 x 7 Internet presence and global audience

The explosive growth of online Internet reporting, online financial services and the 24 x 7 accessibility is starting to level the playing field between institutional and retail investors. With the online IR website, small shareowners now have access to the kinds of financial news, corporate press releases, current and historical archived data and investment analysis tools that had been strictly the preserve of professionals.
  • Single point of reference

Analysts, fund managers and investors value the corporate website as a comprehensive, one-stop-shop on a company's activities. It is often their first port of call for research. Once book marked, it is easy to locate as they can access press releases, financial data, dividend announcements and product details. Analysts, in particular, value the wide-angle view a good website provides of a company and the approach it takes to its relationships with its stakeholders.