Eurozone stability cited as top concern in IR survey

Majority of time spent on investor communications by IROs, CEOs and CFOs now devoted to current shareholders, survey shows

Stability of the eurozone, the prospect of increased regulatory oversight and pervasive systemic market risk are the top three concerns of businesses, according to the eighth annual BNY Mellon Investor Relations Survey.

The survey, which garnered responses from more than 800 companies in 59 countries, also shows companies are focusing more time and attention on current shareholders, that international shareholders are a rising priority for investor relations, and that companies are increasingly looking to sovereign wealth funds (SWFs) as investors.

‘Uncertainty is the underlying theme of this year’s survey, so it’s no surprise company executives are devoting more of their outreach to retaining current institutional investors,’ says Christopher Kearns, deputy CEO of BNY Mellon Depositary Receipts, in a statement.

‘Issues like the eurozone and the US fiscal cliff continue to weigh heavily on markets globally. In response to these challenges, we’re seeing more firms seeking to boost their international shareholders.’

In all regions of the world except Latin America, companies surveyed name eurozone stability as their top concern, followed by systemic market risk, according to the survey. The third spot in most regions is either uncertainty relating to new regulations or liquidity in financial markets.

In Latin America, the chief concern is systemic market risk, followed by financial market liquidity. More than a third of companies, meanwhile, say increased regulatory oversight will decrease liquidity.

Thirty-three percent of the survey’s respondents cite ‘boosting international shareholders’ as a priority this year, an increase from 20 percent last year and 17 percent in 2010.

Also, when asked to name their top investor relations goals for 2013, ‘increasing international shareholder ownership’ comes second after ‘effective disclosure’.

Feedback to the survey also shows that 54 percent of CEOs’ communication time was devoted to current investors in 2012, an increase on 47 percent last year and 42 percent in 2010.

The survey authors say the majority of investor communication time of CFOs and IROs in 2012 has also been devoted to current investors, showing a ‘significant upward trend for all three categories over the past three years.’

In their search to raise capital and gain new long-term investors, companies are increasingly seeking out SWFs, the survey further shows: 62 percent of corporates in 2012 communicated with SWFs, an increase from 47 percent in 2010.

The most frequently mentioned SWF is the Government of Singapore Investment Corporation, with 326 mentions in the survey, followed by Norway’s Norges Bank Investment Management, with 297 mentions, and the Abu Dhabi Investment Authority, with 201.

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