Allen Yeong
KUCHING: Investor relations (IR) is a key component to push Sarawakian public listed companies (PLCs) to the forefront, encompassing elements of finance, communication and marketing to ensure effective dissemination and communication of information.
The major role of an IR firm includes getting insights from the PLC’s management, overseeing the share price movement, building a rapport with analysts and investors, as well as keeping the shareholders updated with accurate financial information and latest developments.
An effective IR should not only be familiar with all the gears within the corporate world, an expert said, but also help PLCs to achieve better valuations in capital markets, therefore supporting PLCs strategically in unleashing advantages in capital markets and becoming giants in their respective fields.
“At Vision Engage, we realised we needed the extra mile to transform IR into a strategic function to ensure effective communication of information to the right group of investors at the right time,” said Allen Yeong, managing partner of Vision Engage to The Borneo Post.
The company is a strategic integrated advisory business focusing on investor relations and business development.
“This maximises the impact from IR with an efficient use of time and resources. Hence, we have added an additional step to elevate IR to the next level – by developing a shareholder analytics application. Shareholder analytics, by definition, is a systematic computational analysis of shareholder data.”
In Malaysia, Yeong recapped that IR practice has predominantly focused on a two-step approach, starting from financial analysis, followed by engagement.
“IR firms will usually kickstart the process by analysing the corporate structure, history, products, competitors and the financial profile of a PLC,” he gave as an example.
“Subsequently, IR firms will communicate their findings in order to help the shareholders, potential retail or institutional investors, research analysts and others to develop a thorough understanding of the PLC and its strategies.
“Effective engagement will develop a strong relationship between the PLC and their investors once the IR establishes the information conduit. This strong relationship is invaluable especially during crisis management,” he said.
“For instance, a client of ours had initially reported record-breaking profits but its share price did not react accordingly prior to our engagement. Upon our shareholder analytics, we realised that only four per cent of the existing shareholders traded the stock. We then redesigned the engagement plan by targeting retail investors as most of the institutional funds do not have the mandate to invest in that company due to its small market capitalisation.
“After our targeted engagement, the number of new shareholders of the company increased by 400 per cent. This helped to create more liquidity in the counter, thereby establishing a strong foundation for further improvement of the share price.
“As a result, the existing large shareholders became more confident and increased their positions. Following that, the share price tripled in three months,” Yeong added.
Yeong went on to explain that a good IR firm helps in maintaining a strong and transparent relationships with the investors on behalf of the PLCs while a great IR firm works strategically with the company to help them deploy capital market advantages to its’ greatest potential by utilising effective engagement and analytical tools.
“Companies with the ambition to be global giants should definitely pay attention to the advantages capital markets have to offer,” he concluded.