The week in investor relations: China’s IPO haul, a new activist on the scene and CEO ups and downs
The week in investor relations is taking a break for the holidays. We’ll be back the week of January 4, 2021. See you next year!
– China’s early emergence from the Covid-19 pandemic allowed the country’s companies to raise money in IPOs – at home and abroad – ‘like never before,’ reported Bloomberg. IPOs and secondary listings from Chinese companies hit a record $129 bn in 2020, according to Bloomberg’s own data, with China Inc netting as much as 37 percent of the listings market: its highest share of the global IPO market since 2009.
– ‘For the first time in modern history, ExxonMobil faces a credible challenge from frustrated investors seeking to overthrow its board of directors,’ reported CNN. A new shareholder activist – Engine No 1 – published a letter addressed to the oil and gas giant’s board of directors on December 7 calling for ExxonMobil to rein in its big spending ambitions, revamp executive pay and explore a push into clean energy. CNN noted that Engine No 1 has now gained the support of the Church of England as well as the $275 bn pension fund CalSTRS.
– Unilever announced that it will put its climate transition plans up for shareholder vote next year, according to The Guardian. The paper reported that the FTSE 100 consumer goods company will share its climate transition action plan with investors in the first quarter of 2021, before a vote at its AGM on May 5. It quoted Unilever as saying it is ‘the first time a major global company has voluntarily committed to put its climate transition plans before a shareholder vote’.
– Shares in German carmarker Volkswagen got a 5 percent boost on Tuesday after CEO Herbert Diess won an internal power struggle when he received the public backing of the company’s supervisory board. The conflict had pitted Diess against Bernd Osterloh, Volkswagen’s labor boss, reported Reuters. The pair have differing views on the pace required to turn the automaker into more of a tech firm modelled on Tesla.
– In other CEO news, Bloomberg reported that shares in China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC), slumped after one of its co-CEOs apparently resigned abruptly. The news outlet wrote on Wednesday that SMIC was trying to contact Liang Mong Song after online media circulated a resignation letter reported to have come from the industry veteran. The news came in the same week MSCI announced it would be removing the company from indexes following pressure from the US.
– Last week the Bank of England announced that it was lifting its ban on shareholder payouts by UK banks. This week the European Central Bank (ECB) did the same, reported The Wall Street Journal – but with heavy restrictions still in place. The ECB said Tuesday that dividends and share buybacks need to be below 15 percent of the combined profits for 2019 and 2020, or 0.2 percent of their key capital ratio, whichever is lower. Banks need to be profitable and ‘have robust capital trajectories,’ reported the WSJ.