Firms with fledgling IR programs can benefit from a strong digital strategy, says Investis
Over the last eight or so years, investor relations in the Middle East has really taken shape. With the development of regulatory requirements, demand for transparency from both international and domestic investors and stakeholders and the increase in competition for capital among listed and soon-to-be listed companies, Middle Eastern firms simply cannot ignore the need for a strong IR strategy.
And a key component of any such strategy is digital communication – both through the website and across digital channels. While the Middle East has done well to adopt IR industry best practices, the region is only now beginning to incorporate digital elements, and by comparison with global peers, such as companies on the FTSE 100 and S&P 100, data shows that Middle Eastern companies have some way to catch up.
There are always exceptions but, on the whole, there is significant room for improvement at Middle Eastern firms when it comes to communicating more effectively through their corporate/IR website and digital channels. Research continues to support the argument that investors are using a company’s IR website as part of their research process and while regulation plays a crucial role in the need to communicate online, promoting a company’s investment story through the channels being used by their audiences is more important than ever.
A recent Investis survey looked at how buy-side investors use digital avenues to research companies, with one fund manager noting that ‘the website needs to be clear – if not, I move on to another company’.
In terms of digital IR best practice, having a mobile-friendly website sits at the top of the ‘must have’ list. Currently, one in four visits to corporate websites comes from a mobile device, according to the Investis research, and the number of mobile visits to corporate websites has increased by more than 60 percent in two years. At the same time, while almost three quarters (73 percent) of the FTSE 100 and 68 percent of the S&P 100 provide a mobile-friendly website, only 21 percent of companies in the UAE 20 do the same.
Another aspect of digital IR is social media. In addition to being accessible across all devices and screen sizes, social media for corporate communications and IR is increasingly becoming part of a best practice digital IR strategy. In fact, 70 percent of those in the global investment community say social media plays a role in their decision-making process, according to a 2014 Brunswick study.
Additionally, 40 percent of institutional investors seek information about companies from third-party influencers on social media, shows the Investis research. Again, the FTSE 100 leads the way with 73 percent of companies using social media for corporate/investor relations (up from 31 percent two years ago). The UAE 20 lags behind with just 58 percent of companies using social media – demonstrating that there is still much room for improvement.
Companies’ approach to digital IR has changed. A strong and effective digital IR/corporate communications strategy is no longer something you do if there’s extra money left in the budget. Investors and the financial community are listening to and watching your digital channels. The effectiveness of your communication through the website and social media is having an impact on how they view you as an investment proposition – and could be a differentiator between your company and a competitor.
Jennie Guay is director of channel relations for UK and EMEA at Investis