Expanding shareholder bases internationally is a top priority for global companies; Social media used by only 27% of firms to engage investors
Systemic market and political risk, followed by the uncertainty of new financial regulation, are the top issues named by companies as impacting global market confidence, according to the latest annual investor relations (IR) survey conducted by BNY Mellon, a global leader in investment management and investment services.
Roughly three-out-of-four of all respondents rated systemic risk, political risk, and levels of government regulation as important issues affecting market confidence. While Eurozone issues are no longer the top concern for companies globally, as last year's survey revealed, they remain the greatest concern for firms based in Western Europe, followed by political risk. Latin American companies, however, point to government regulation as their chief worry.
The importance of expanding shareholder bases internationally remains a key priority for companies globally, with 45% reporting this among their prime goals, up from just 17% in 2010. Western Europe leads this trend with 59% of companies reporting international diversification of investors as their main priority, with emerging Asia and the Middle East close behind (54% and 53%, respectively). Energy companies are the most active in targeting investors outside their home markets (58%) and consumer staples the least (37%).
Developed as a benchmarking tool for BNY Mellon's depositary receipt clients, the survey, Global Trends in Investor Relations, looks at how publicly traded companies are managing their IR practices and the issues affecting them. This year's report is based on survey results from nearly 700 respondents across 63 countries that span the range of market cap and industry sectors, including financials, industrials, consumer, technology and healthcare.
"Global markets are showing resilience, albeit with significant differentiation between regions," said Christopher M. Kearns, CEO of BNY Mellon's Depositary Receipts business. "Looking ahead, investors continue to be wary about the effects of systemic risk, politics and regulation on the world's markets and how they'll perform. In response to these challenges, we're seeing more firms seeking to boost their international shareholders and diversify their investor base. Depositary receipts remain a crucial tool for companies in both traditional and emerging markets to source new pools of capital."
Other key findings of the survey include:
"The imperative for companies to maintain an active, engaged investor relations program has never been greater," said Guy Gresham, head of the Global IR Advisory team in BNY Mellon's DR group. "Our IR specialists continue to work closely with clients in all regions to support and maximize their outreach when targeting new investor communities."
This is the ninth annual investor relations survey conducted by BNY Mellon's DR team.