Middle East IR Society launches code of best practice

Middle Eastern firms are increasingly recognizing the benefits of investor relations, say the co-founders of the region’s IR society, which used its fourth annual awards to launch a new code of best practice last week.

‘Over the past few years the financial crisis has continued to have an impact on Middle Eastern markets and therefore the IR function has had to be clearly aligned with companies’ strategies and communicated broadly to investors and analysts,’ explain Alex Ménage and Michael Chojnacki.

‘Having said that, we also believe there is still more that can be done,’ add the pair, who set up the Dubai-based IR society in July 2008. This is where the society’s new code of best practice comes in, with recommendations on IR communications, annual reports and access to senior management.

Embodying this is DP World, a global container handling firm, which took home the grand prix award for the best company for investor relations in the Middle East. The company, which had its NASDAQ Dubai Stock Exchange IPO in 2007 and a dual listing on the London Stock Exchange last year, is in the process of developing three new container terminals in London, Santos and Rotterdam. It says access to senior management plays a key role in its IR program.

‘At DP World we work hard to maintain a recurrent dialogue with the investment community throughout the year,’ says the firm. ‘We make it a priority that shareholders always have access to either management or the investor relations team and that they are updated on a regular basis in a timely manner with consistent and clear information.’

As markets develop and open up to international investors, IR is becoming more important in the region, adds DP World, ‘intensifying the fight for capital’.

‘The quality of the IRO is now understood to be a key part of the investor’s decision-making process. Investors expect an IRO to be empowered to speak on behalf of the company,’ continues DP World. ‘As such, investors look to an IRO to have a thorough understanding of the operational drivers of a company’s business and the analytical skills to analyze all financial aspects of an organization, enabling them to manage the day-to-day relationship with the investor community.’