A complete wrap-up of the 1999 CIRI conference
Cloudbursts spilling over the Rockies failed to dampen the spirits of the 255 delegates gathered in Banff for the twelfth annual Canadian Investor Relations Institute conference in May.
The speakers during the event (overseen by co-chairs Bob Tait of Canadian Tire Corp and Debbie Taylor of Atco Structures) were a distinct improvement over last year's lackluster roster. Getting down to business, Hugh Benham, fund manager with Greystone Capital Investments, had IROs chortling with his assessment of the market. 'Economically speaking, we're being carried on the back of the US juggernaut,' he pronounced. 'It's a Goldilocks environment for both countries – not too hot, not too cold – just right.' He went on to caution IROs about the rash of stock option repricing in Canada this annual meeting season: 'It's a no-lose situation for beneficiaries and it's costing shareholders a lot of money.'
The conference underlined the fact that the web is still one of the hottest issues for Canadian IROs – whether in the session on marketing principles or the portfolio manager roundtable. When keynote speaker David Flaschen, Thomson Financial's CEO, was grounded on a Boston runway, Thomson Financial Investor Relations' Rhonda Chiger stepped into the breach with dramatic figures showing the incursion of the web into the lives of investors.
The prospect of a market downturn also infused many of the discussions. 'A down market provides challenges and opportunities for IR,' suggested Betty-Ann Heggie of Potash Corp of Saskatchewan, explaining that when her company was a growth stock the IR team focused on US investors. Now it is showing value characteristics again, Potash is looking back to Canada's concentration of value investors. Dave Moneta of TransCanada Pipelines suggested a 'comparative perception study' of senior management as well as the buy and sell-side by an third party: how the investment community sees the company compared to management's view; how that impacts the stock price; and how to improve valuation.
Canada's hot M&A environment was covered in a session moderated by John Wheeler of Telus. 'You can't avoid these high profile transactions in the media these days,' noted Wheeler, who is postponing his stint as Ciri's new chairman while Telus completes its own merger with BC Telecom. Jill Gardiner, investment banker with RBC Dominion Securities, pointed to the record $150 bn in transactions last year, with almost 50 percent of the deals cross-border in nature. The pace is only marginally slowing in 1999. 'Bigger is better is a key theme,' she said. 'We're seeing mega-transactions we've never dreamed of before.' Her advice? Be prepared.
Former Ciri chairman David Mills capped a cross-country motorcycle trip with a session on new issues in disclosure which turned into a debate between the Toronto Stock Exchange's John Carson and sell-side analyst Martin Molyneaux of First Energy Capital Corp. 'Fact is, retail investors are disadvantaged when access is given to institutional investors and analysts,' Carson said of the 'selective disclosure' scare spreading from the US. 'We've a better system in Canada: positive obligation to release material information and proactive administration by the exchanges. It all comes down to fostering a culture among management. It can't come from IROs; it has to come from the top.'
The conference wound down with former Ciri chairman Bill Rowe of Nova Corp receiving this year's award of excellence, and an incisive address by Canada's number one economist, Jeff Rubin of CIBC Wood Gundy Securities. 'Look beyond market forecasting to the underlying environment and we see global cooling outside North America, not global heating,' said Rubin, pointing to the two back-to-back weakest years for the global economy in 30 years and the two strongest for North America. 'And the two are not unrelated. In fact the single largest threat to the North American equity market is a global recovery.'
Despite the stream of hard facts, the most indelible impression will be of the wild Tuesday Night Fever party sponsored by BCE Energis E-News Services and the Carson Group. Austin Powers, along with his go-go dancers and Twister, limbo contests and lip-syncing, had the last word on the conference: 'Yeah, baby.'