As the SGX continues to grow and diversify, global investors, buy-side analysts, and other key stakeholders are seeking a more modern approach to Investor Relations. IROs say a key responsibility is adopting new communications technologies.
Asia’s most international stock market, the Singapore Exchange (SGX), has been aggressively courting promising corporations and buyers at home and abroad. But as the market continues to expand, there has been a call to increase the scope and richness of Investor Relations — the growing influence of mobile apps and the inconsistency of third-party data has made digital offerings from direct corporate channels a must.
The Importance of Communication
According to a 2013 IRPAS survey, 94% of Singaporean mid- and large-cap companies have an IRO or dedicated IR office, 90% of which report that their key duties are communicating and liaising with investors and financial analysts. Mr. Harold Woo, President of IRPAS, noted that “in an increasingly competitive business environment where investors are faced with multiple investment options, effective and timely communication is crucial to an organization’s reputation and valuation.”
Acknowledging this fact, then SGX CEO Magnus Böcker stated, “Clearly, there are opportunities for companies to focus on enhancing the role of IROs.” He emphasized that investor trust is a requirement for a company listed on any market, and said he “strongly encourage[s] companies to proactively engage their shareholders.” Yet many are still struggling when it comes to communicating with institutional investors and keeping shareholders abreast of important developments.
Adopting a More Holistic Approach
Historically speaking, there has been an impenetrable partition placed between Marketing and IR. But as with most communications in the digital age, that division has been effectively blurred into nonexistence.
By its very definition, a fully integrated marketing strategy involves optimization across all communications channels, even where a particular channel, such as IR, has been historically geared towards “hard data.” Today, however, any effective IR program should include brand building in its mission statement. Offering an up-to-date interface to institutional investors is a powerful influencer towards positive brand perception — and positive brand perception is the soft influencer of investor confidence. It projects the message that “we are current, relevant, and engaged with our stakeholders.” Conversely, its absence suggests a company not quite up to speed.
Why is this worth mentioning? SGX and the Singapore government are very concerned about building a higher quality stable of listed companies. Currently, there are far too many thinly traded penny stocks, which are contrary to the exchange’s overall objective. In 2015, according to Asia One, there was a consolidation of listings intended to boost individual listing value and credibility, but at the end of the day, it wasn’t considered a great success. Offering a state-of-the-art communication channel seems like a (small, but important) ticket of entry for a modern, credible listing.
Investing in the Information Age
Given the rapid proliferation of digital tech over the past two decades, modern investors have come to expect constant, seamless access, available across every type of digital device. To this end, Singaporean IROs and IR departments now have access to a full suite of digital service offerings to dispatch information quickly and accurately — traditional websites, mobile websites, social media, and perhaps most importantly, mobile apps.
There are already 2.6 billion global smartphone subscriptions, and over 70% of the earth’s population will have a smartphone by 2020, as TechCrunch reports. It’s worth mentioning that today, Singapore leads the world in smartphone market penetration at 85%, a full 15% above the next highest nation, according to Hardware Zone. Unsurprisingly, smartphones now dominate the digital landscape, with the average adult spending 90% of his or her mobile time using apps, according to a recent Yahoo and Flurry report. This behavioral trend is supported by public opinion: a 2015 Go-Globe study revealed that 89% of consumers prefer native mobile apps to mobile websites.
Sending frequent, detailed updates from a branded corporate app is a powerful way to create transparency for your investors, instill confidence, and engage your audience using the tools they already prefer. While incorporating every digital channel is critical for making corporate information as accessible as possible, apps have the advantage of being fully customizable and portable and, of utmost importance, are capable of sending push notifications to deliver real-time updates. Already, tools like ShareholderApp are being used across global equity markets.
The SGX is a burgeoning world market, and local IR professionals will obviously continue to focus on ensuring that their corporate investment information is in-step with global expectations. While many Singapore-based IROs have struggled to find an ideal balance in their services, there’s still plenty of time to engage key stakeholders and establish trust among institutional investors — so long as they have the right tools for the job.
(Main image credit: Román Emin/flickr)