Research: Asian firms have most diverse investor base

Sep 19, 2018
New data shows those in North America are most likely to be domestically owned

Asian companies have the most diverse investor base, with less than 60 percent of shareholders coming from the region, according to new data from IR Magazine

The 58.2 percent domestic ownership level at Asian firms is the lowest for each of the regions studied, with Europe coming in at 67.2 percent and North America by far the most heavily domestic at an average 86.5 percent, according to responses from 566 IR professionals.

As well as seeing the lowest levels of domestic ownership, Asian companies also have the most diverse shareholder bases, with a more evenly spread split across regions than is seen elsewhere. On average, 19 percent of the Asian shareholder base comes from North America, almost 17 percent from Europe and almost 6 percent from elsewhere.

This compares with Europe, where less than a quarter (24.5 percent) of investors come from North America and just 3.7 percent come from Asia. This is lower than the 4.6 percent from elsewhere.

The picture is even less diverse in North America with its domestic majority base of 86.5 percent leaving little room for international investors. Just 9.3 percent come from Europe, 2.5 percent from Asia and 1.7 percent from the rest of the world. 

While the data presents a snapshot of the average regional shareholder base, it is not possible to identify whether companies with a certain type of shareholder base or a more proactive IR team are more or less likely to respond to the survey.

Joe Racanelli, director of IR at Sherritt International, talked about the Canadian firm’s Asia marketing back in February. The company had, in November 2017, taken its first trip to the region in four years, he explained to Ben AshwellIR Magazine’s digital editor. 

‘Going out to Asia is a significant investment for a company in Toronto – you’re looking at a week away from your day-to-day activities,’ Racanelli said at the time. But taking advantage of increased interest in electric cars – and the nickel and cobalt needed to make them – Sherritt decided the time was right, collaborating with a Toronto-based broker to visit Hong Kong, Singapore and Sydney.

Another challenge in heading east is the difference in disclosure regulations for holdings companies. ‘In Asia we met with a couple of companies that had holdings and we had to ask them point-blank what their holdings were – and they were reticent to say,’ explained Racanelli. ‘It’s important to work with your broker in those situations to get a better understanding; its client is both the issuer and the investor.’

Click here to read the original interview with Joe Racanelli, director of IR at Sherritt International.

 

IR Magazine Global Forum and Awards

The IR Magazine Global Forum & Awards takes place this October in Amsterdam, Netherlands. We have a great agenda lined up, focusing on the hottest global IR topics, including:

  • Passive investing: How technology is changing the dynamics for investors and IR
  • Expanding your investor base with innovative approaches to targeting
  • Trade, Tax and Trump: The global economic outlook
  • A Practical Guide to Mifid II: Seize the access opportunity

View the full agenda, read speaker profiles and book your tickets here.

 

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