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Jan 15, 2008

Asian accomplishment

Talking to some of the winners of the IR Magazine South East Asia Awards 2007

Recent years have been tough on business in South East Asia. The bullish growth of China and India has made it harder for companies to get their voices heard. So it not surprising that so many IR Magazine South East Asia Award winners have honed their communication skills over the last 12 months.

A good example of this is CapitaLand, the winner of the grand prix for best IR by a large cap. ‘I believe we were extremely proactive during 2007,’ says Harold Woo, senior vice president of IR at the group. ‘We have participated in a number of brokers’ conferences and also met investors on a one-to-one basis when they have come to Singapore.’

It was a busy year for the real estate giant. Two new property funds have been launched to invest in India and China, each worth S$500 mn ($346 mn), and CapitaLand sold off its 90 percent stake in Singapore’s Tamasek Tower, the world’s largest cylindrical building, for S$1.04 bn. ‘There were numerous announcements – almost one a week – which captures a lot of attention,’ explains Woo.

Of course, extra attention is fine when things are going well. ‘CapitaLand reported very good results last year,’ notes Woo. ‘Our half-year figures exceeded the total for all of 2006.’

Singaporean respondents to IR magazine’s investor perception study concur with Woo’s assessment. The survey asked how Asian IR is getting better – and 33 percent, the highest proportion, said levels of disclosure have improved over the last year.

Not all good news
The good news story doesn’t extend across the whole market, however. Some winners pointed to a lack of communication from small and medium-cap companies – although they differed in their explanations of the reasons for this.

‘Smaller companies have difficulty after listing because the research houses are not prepared to cover them. This in turn encourages them to neglect investor relations,’ states Ong Tiew Siam, company secretary of Tat Hong Holdings, an industrial equipment supplier and winner of the award for most improved IR.

For Tang, the solution is twofold. First, increase disclosure requirements. Second, have a minimum market cap on the Singapore Stock Exchange (SGX). ‘This could be around S$100 mn. If a company lists and its valuation sits at around S$50 mn or S$70 mn, no one is going to take any notice.’

Kenny Yap of Qian Hu Corporation feels bad IR by smaller companies is often down to putting too much focus on the bottom line. Yap, chairman and chief executive, also finds time to manage IR at the firm, and is adamant that good IR is rewarded – whatever a company’s size. Yap must be doing something right: Qian Hu walked away with the grand prix for best IR by a small or medium-cap company.

He puts his company’s success down to instilling a culture of openness throughout the business. ‘If small and medium-cap companies have the right attitude, there is no reason why they should be ignored by the investment community,’ he explains. ‘For me, investor relations is about consistency, approachability and disclosing more than you have to.’

Broadening experience
Good communication is not just about talking to investors; it can also include talking to your peers, and there has been improvement on this front recently too. Investor relations societies are starting to take off around South East Asia, giving IROs the opportunity to share experience and expertise.

CapitaLand, as well as another award winner, SingTel, are charter members of the Investor Relations Professional Association of Singapore (IRPAS). Launched by the SGX at last year’s awards, the society now boasts over 120 members. ‘IRPAS has done much to raise awareness and boost the professionalism of IR in Singapore,’ says Woo.

Collaborative IR is not just reserved for the city state, either. ‘Thailand has had an IR club for a few years longer than Singapore,’ says Richard Jones, head of IR at Thai Beverage, which claimed the award for best IR by a Thai firm.

Malaysia has recently got in on the act, too. ‘The Malaysian Investor Relations Association got up and running in 2007,’ says Woo. ‘Along with the societies in Singapore and Thailand, I think these are very positive developments for IR in Asia.’