The practice of and resources for IR in Asia have traditionally differed from those in North America and Europe. The experience of Covid-19 and its associated restrictions to working practices has heightened these differences.
Asia was the region first in and last out of the pandemic’s restrictions, which were often more severe there than elsewhere. Examining recent history of Asian IR practice helps us understand where IR is now in Asia and what the immediate priorities are for the future.
The IR Magazine Global Investor Relations Practice Report 2022 shows the average Asian IR budget at $127,000. This is the lowest budget recorded for Asia since IR Magazine started recording these figures in 2011 and is less than half of the global average IR budget of $336,000.
IR budgets are typically lower in Asia than found globally. But while Asian budgets sank to their lowest levels last year, budgets in North America and Europe actually rose. Having fallen in 2021, North American and European budgets are now on their way back to their pre-pandemic levels.
While it may appear alarming that Asian IR budgets are going in the opposite direction from their peers, there are positive signs in this development. Over the course of 2022, North America and Europe saw Covid pandemic restrictions lifted much earlier than in most of Asia. Studying IR budgets over the course of the Covid-19 pandemic shows budgets fall and rise in line with the level of pandemic restrictions. If this trend continues, Asian IR teams can expect to see a rise in their budgets during 2023.
Investor events and meetings
The difference in IR activity in Asia is shown in the IR Magazine Global Roadshow Report 2022 and Investor Events report 2023. Just a quarter of Asian IROs went on the road in person in the 12 months before Q3 2022. This compares with 54 percent of IROs globally, and with the 83 percent of Asian IROs who went on the road in 2019.
During this time, Singapore was the only Asian roadshow destination to feature in the list of top cities, but even then just over 6 percent of global companies visited, compared with more than 23 percent in 2019. Hong Kong, the other traditionally popular roadshow destination in Asia, did not feature at all.
There is a similar story when it comes to investor conferences. In-person investor conferences were attended by 38 percent of Asian IROs in the 12 months before Q3 2022, compared with 68 percent of European and 85 percent of North American IROs. Asian IROs attended an average of 1.5 events, compared with a global average attendance of 2.7.
Recovery in activity
Analysis of the second half of 2022 shows a recovery in activity. In the six months to the end of the year, Asian IROs attended an average of 3.8 in-person investor conferences. This is more than twice the number they attended over the previous 12 months and just down on the global average of 4.3 in-person conferences attended in this time.
A similar recovery is seen with in-person roadshow activity. Asian IROs went on the road an average of 2.1 times during those six months. While this is less than the almost four road trips European IROs took in this time, it is higher than the North American average of 1.7.
For both roadshows and investor conference activity in the last half of 2022, the ratio of in-person to virtual investor engagement is still lower in Asia than is found in Europe or North America. But it does show how quickly in-person activity resumed in Asia once restrictions were lifted.
Looking at the data from the IR Goals & Challenges report, released in April, we can see how Asian IROs view the challenges of the previous year and what their expectations are for 2023. When asked what they consider to be their main challenges in the previous year, more Asian IROs mention Covid-19, macroeconomics and investor meetings. They are less concerned than their peers elsewhere with typical investor-related issues such as targeting or investor perception.
Looking ahead to 2023, we can see changes in what Asian IROs perceive their challenges will be. There is still strong concern regarding macroeconomics and a greater concern about investor meetings than is found globally. The challenge of Covid-19 has waned and, while there is still lower concern for investor-related issues, wider market-related issues such as volatility have risen in prominence.
Goals for 2023
As part of the research for the IR Goals & Challenges report, IR professionals were asked to rank their primary objectives for 2023. The main goal for Asian IROs is enhancing engagement with existing shareholders, with 35 percent listing this as their top priority and more than seven in 10 mentioning it in their top three objectives.
This is in clear contrast to the aims of North American and European IROs, who have targeting new investors as their main goal for 2023. Just 13 percent of Asian IROs have targeting new investors as their top priority, compared with 35 percent of European and 42 percent of North American IROs.
When looking at the impact of Covid-19 and its associated restrictions to working practices, both IROs and investors frequently mention that the lack of in-person contact has led to a loss of the kind of interpersonal engagement that is often key to cultivating good relationships. Both missed the informal and non-verbal dynamics of in-person meetings.
Asia was the last region to come out of the pandemic restrictions and to fully open up. It is therefore understandable that Asian IROs, given the length of time they have been unable to engage in such a manner, are keen to prioritize enhancing engagement with existing shareholders before actively seeking out new investors.