Reflections on a quarter-century of IR from Eva Chan to mark IR Magazine's silver anniversary
Until five years ago I was CFO of Beijing Capital Land, a Hong Kong-listed mainland property company. When I told my friends I was leaving to become head of IR at CC Land Holdings, a Chongqing-based mainland property developer, they were surprised. Some even said: ‘Eva, are you downgrading yourself?’ I was more blasé.
Toward the end of my five years with Beijing Capital Land, where I also served as company secretary and head of IR, I was spending more than half my time dealing with investors so my move to CC Land was a logical one.
As more Chinese companies seek to list in Hong Kong and overseas, the role of IR is gaining prominence and provides a new career opportunity for accountants like me who would like to spend more time interacting with a broad mix of company stakeholders.
Unlike in the US and Europe, where IR has been well established for decades, the profession is relatively new to Hong Kong, and I was privileged to be among its pioneers.
To succeed in IR, one needs a wide range of skills, integrating finance, communication, marketing, fund management and compliance to ensure an effective dialogue between the company and its stakeholders.
My accounting background has been a big plus, helping me talk to analysts and win their respect. I’m also very familiar with the listing rules: a good IRO needs to know what he/she can say and cannot say.
The role of the IRO has grown as bigger companies and more institutional investors get involved in the Hong Kong stock market. This change began in 2005 when the big Chinese companies started listing in Hong Kong.
Ten years ago, if your company’s market cap was HK$7 bn, you were among the top 50 companies in Hong Kong. To make the top 50 now, you need to have HK$60 bn ($7.7 bn). Bigger funding requirements necessitate – and attract – more institutional investors worldwide.
Ten years ago only 38 percent of the traders on the Hong Kong Stock Exchange were institutional investors. Now it is close to 60 percent.
I believe the demand for IROs in Hong Kong will explode over the next five years, mirroring a global trend. There will be a completely different market environment here, with explicit requirements from the international fund management market for more information before placing their funds in the local economy.
Eva Chan is founding chairman of the Hong Kong Investor Relations Association (HKIRA) and head of IR at CC Land Holdings.