Hong Kong tops IR best practice league in Asia

More than half the analysts and investors following Hong Kong firms believe those companies are best at IR in the region, reveals IR Magazine’s latest Asian investor perception study. Singaporean firms come second with 38 percent, while Taiwan and Thailand rank third and fourth with 21.9 percent and 13.9 percent, respectively, of favorable votes.

Interestingly, while respondents covering Chinese companies are almost as numerous as those following Hong Kong ones, only 7.9 percent of them deem mainland firms to be the leaders in terms of IR best practice.

Survey respondents are most satisfied with the knowledge and efficiency of IROs, which score 6.8 out of 10. One point of concern cited is the need for IR to have a broader view of industry, with one Indonesian sell-side analyst saying IR departments should be able to ‘provide more color and more information on their opinion of the market.’

A Singaporean buy-side analyst would like IROs to have a ‘greater and deeper financial knowledge’, while another comments that ‘there should be more frequent engagement with fixed income investors.’ A Taiwanese sell-sider notes that ‘an annual investor/analyst day with the business heads present’ would be useful.

Access to senior management is also judged satisfactory, although some respondents complain contact is not frequent enough. ‘We’d like greater access to senior management via conference calls,’ comments a Malaysian buy-side analyst. ‘They should make more webcasts available for investors,’ echoes a Hong Kong-based sell-side analyst.

The importance of an English-language website is also highlighted, as is updating the available material. ‘With most, the documents on their website are out of date and less detailed than the ones they use in the analyst briefings,’ remarks an analyst from the Philippines.

Corporate governance is the main negative issue cited by respondents, especially those covering Malaysian firms. ‘Singapore and Hong Kong at least have very good disclosure,’ says one Hong Kong sell-sider. ‘Corporate governance is comparatively poor; it really needs to improve,’ says a fellow analyst based in China.

Other comments include the need for better medium-term guidance, for disclosure about ‘other responsibilities the members of senior management have outside the company’ and for disclosure to be fairly offered to all interested parties. ‘Allow the buy side to see sell-side information,’ urges a buy-side analyst from Thailand. ‘Also, some companies do not allow buy-siders to participate in meetings and I would like this to change.’

Finally, hiring an external consultant to handle IR tasks generally does not go down well. ‘There should be fewer third-party IROs,’ declares a Singaporean sell-side analyst.