Mexican IR institute to hold first conference
Mexico’s investor relations institute aims to develop the role in Mexican companies from a niche arm of corporate affairs to an institutionalized widespread profession.
The Instituto Nacional de Relacion con Inversionistas (Inari), a non-profit association, was officially launched on May 23, 2018 and currently has 40 members. It will hold its first annual conference on November 22, when seven expert panelists are expected to cover topics including best practices and the recent impact of regulation and technology on IR.
Its president and founder, Maximilian Zimmermann, believes the low number of indexed public companies in Mexico indicates the need for a stronger learning network for IROs. He says Mexican small caps generally have little understanding of the functions of IR, and that part of Inari’s aim will be to strengthen the IRO profile as well as help smaller companies outsource their services.
‘There are slightly more than 150 public companies in Mexico, but only 35 are on the S&P/BMV IPC Index,’ Zimmerman explains.
Speaking on the specific impact of regulation on IR in the Americas, such as Mifid II, Zimmerman observes that investors in the US are still ‘pushing for a level playing field’.
But he adds that market research has dwindled as regulatory restrictions on sell-side access to investor meetings takes hold. The challenges in Mexico are particularly marked because two thirds of the market is made up of small investment firms controlled by their main shareholder.
‘Globally, large asset management firms are paying for less research than they used to receive and are only purchasing it from two or three sources, in some cases specific geographies or industries. That is going to affect the amount of analyst coverage Mexican companies have,’ Zimmerman comments.
The directive will also intensify the work required of IROs to independently embark on roadshows, an approach now favored by some IR teams over their former reliance on banks. Zimmerman says independently curated roadshows can often result in IROs needing to hire their own broker as well as committing to longer overall travel time. Mifid II is also seen as an opportunity for IR professionals to reclaim control over their relationships with investors.
While structural change in Europe redirects the flow of information to the market, US President Donald Trump’s Twitter feed continues to pique the concern and interest of corporate executives and investors, creating debate among IROs on both sides of the Mexican border.
‘It’s interesting that Trump tweeted out mid-August about how quarterly earnings should be a six-month system, as it makes companies focus too much on the short-term and spend more money,’ Zimmerman says. ‘That brought about discussion in the community about how this could be a good thing but also potentially negative in terms of transparency. As the US is the largest equity market in the world with the highest regulatory standards, this could be a step back.’