The week in investor relations: Index shake-ups, ESG scores and dividend cuts
– The stock market gyrations caused by the Covid-19 pandemic could lead to a major shake-up of the S&P 500 index, according to Bloomberg. More than 30 companies are at risk of being ejected from the world’s most-followed stock index, reported the article, citing research from DataTrek.
– Nasdaq plans to introduce new restrictions on listings that will affect certain countries, including China, according to Reuters. The rules will put a minimum listing on the size of IPOs and also include new auditing requirements, noted the report. The move follows an accounting scandal at US-listed Chinese firm Luckin Coffee.
– UK group Compass used technology to make an equity capital-raising available to retail shareholders, reported the Evening Standard. Normally individual shareholders are excluded from such capital-raisings for logistical or legal reasons. The retail participation was enabled through an app called PrimaryBid.
– BlackRock was the latest firm to say that ESG-focused companies are outperforming during the current downturn, reported Bloomberg. The asset manager said ‘88 percent of sustainable indexes did better than their non-sustainable counterparts in the first four months of 2020,’ according to the article.
– S&P Global launched a new set of ESG scores covering 7,300 companies, the firm announced in a press release. To create the scores, S&P will rely on the SAM Corporate Sustainability Assessment, which it acquired at the start of 2020 from RobeccoSAM.
– Investors are trying to understand the full impact of the Covid-19 pandemic on dividends, reported the Financial Times (paywall). Last year saw record payouts worldwide, but in 2020 overall dividends could fall by 30 percent in Europe and 15 percent in the US, said Thomas Schuessler, a fund manager at DWS.
– Companies are not being punished as badly as they would normally be for missing earnings, noted a report in the Wall Street Journal (paywall). Over the last five years, a company missing earnings would lose on average 2.8 percent in market value between two days before the results and two days afterwards. But the average for this earnings season is just 1.1 percent, according to the article, quoting data from FactSet.