The week in investor relations: ICE’s former IR lead, incoming SEC chair and voting for diversity
– The DealBook newsletter from The New York Times focused on the political ‘entanglements’ of the NYSE and parent company Intercontinental Exchange (ICE), where Senator Kelly Loeffler, the Georgia Republican who lost her seat in last week’s run-off election, previously led investor relations. Looking at the hefty political donations from Jeffrey Sprecher, Loeffler’s husband and CEO of ICE, DealBook said that while ‘the company’s political entanglements are unique, similar issues are springing up at other firms.’
– It was widely reported this week that former chair of the Commodity Futures Trading Commission, Gary Gensler – who has since November been leading US president-elect Joe Biden’s transition planning for financial industry oversight – will be named as the new chair of the SEC. Reuters reported that the ‘appointment [was] likely to prompt concern among Wall Street firms of tougher regulation’ in contrast to the four years of ‘rule-easing’ enjoyed by banks, brokers, funds and public companies under President Donald Trump’s SEC chair Jay Clayton.
– State Street Global Advisors published its proxy voting agenda this week, with a renewed focus on diversity, among other ESG issues. The Financial Times (paywall) reported that State Street’s $3.1 tn investment arm will start voting against directors of big companies that do not disclose the racial and ethnic make-up of their boards. For 2021 the Boston-based asset manager is calling on companies to report the information but the paper reported that beginning in 2022, it will also vote against the chair of the nominating and governance committees of companies that do not have at least one minority board member.
– The FT also reported on calls this week from the UK’s Investor Forum that all UK company AGMs include a ‘say on climate’ vote – a concept popularized by hedge fund billionaire Chris Hohn. ‘[Mandatory climate votes] would be absolutely groundbreaking,’ the paper quoted Andy Griffiths, executive director of the Investor Forum, as saying. He added that there was a need for a ‘systemic solution’ rather than individual company responses.
– The ongoing saga around the blacklisting of Chinese companies by the Trump administration saw three new firms added to the list this week, including smartphone maker Xiaomi and China’s third-largest national oil company, reported the Independent. At the same time, US News reported that a State Street-managed Hong Kong ETF would resume investments in other recently banned shares.
– The world’s second-largest video-sharing app, Kuaishou, this week got the go-ahead to go public in a Hong Kong listing that is expected to raise up to $6 bn, reported the South China Morning Post. The Beijing-headquartered app – in which Tencent Holdings, China’s largest games publisher, owns a 21.6 percent stake – boasts around 300 mn live-streaming users a day and the paper said the IPO could ‘set the stage’ for listings by competitors Bilibili, Douyin (China’s version of TikTok) and iQIYI.
– In South Korea, Lee Ju-yeol, governor of the Bank of Korea, warned against excessive borrowing that has pushed up the country’s Kospi stock index as well as property markets, reported Bloomberg. ‘Increasing investment based on excessive leverage can cause unbearable losses for investors when there’s a price correction, and I’m worried about that,’ he said at a briefing after the bank’s board unanimously agreed to hold its key rate at 0.5 percent.
– A flurry of IR-related product launches were also announced this week. Broadridge revealed a new AI-powered platform offering proxy-voting data and analytics, Edison announced a series of ESG reports it said would help democratize investor access to ESG insight, and Sentifi launched a portfolio intelligence platform aimed at retail investors.