The week in investor relations: Climate focus, M&A weakness and an index reshuffle

ESG

– Companies came under increased pressure from climate change resolutions this year, reported the Financial Times (paywall). Up to May 20, climate resolutions saw an average of 23 percent support, compared with 16 percent for all of last year, said the article, citing data from Proxy Insight.

– Many shareholder meetings in 2021 will focus on issues related to the Covid-19 pandemic, including ‘treatment of workers and corporate boards’ responses to the crisis,’ according to Pensions & Investments. But climate change will continue to be a key topic as well, noted the article. 

Buy side

– Hedge funds that follow merger-arbitrage strategies are changing tack and increasingly betting against targets being acquired, according to the Wall Street Journal (paywall). The uncertainty caused by Covid-19 means deals are more likely to ‘get delayed, close at lower prices or fall through,’ noted the article.

– Hedge funds run by women outperformed those run by men during the first four months of the year, reported the FT, quoting data from HFR. The small group of women-run funds lost 3.5 percent, compared with 5.5 percent across the broader industry. The proportion of women in senior roles at hedge funds stands at just 10.9 percent, noted the article.

Companies

– Trading in Gilead Sciences around the time of positive news about a Covid-19 treatment could be investigated by regulators, said experts who spoke to Reuters. The article explained that there was an unusually high volume of options trading prior to the release of a news report about the company’s drug remdesivir.

– The Covid-19 pandemic influenced companies joining and leaving the FTSE 100 during the latest reshuffle, reported Morningstar. Cruise operator Carnival and airline easyJet were among the four companies to exit, while online security firm Avast and home-improvement retailer Kingfisher were among those to move up from the FTSE 250.

Markets

– The London Stock Exchange (LSE) said there is support for a cut in European trading hours by 90 minutes, reported Reuters. The LSE has conducted a consultation into the idea, which is aimed at making trading jobs more diverse, family-friendly and less stressful. Any changes would ‘ideally’ be aligned across European trading venues, said the LSE. 

– Goldman Sachs revised its predictions for the US stock market and now doesn’t expect a significant revisiting of lows, noted Bloomberg. The firm’s equity strategists said in a note published May 29 that the S&P 500 is unlikely to fall to 2,400 and could climb to 3,200, although the year-end target of 3,000 is still in place.

In case you missed anything, here are IR Magazine’s stories posted this week:

– IR lessons learned during the Sars outbreak
– Opinion: Why IROs should consider sustainability to be a career opportunity
– ‘They have different levels of ambition and confidence’: Today’s IR leaders broaden their remit
– Companies urged to spell out their purpose
– Measuring E&S report now available
– Tech talk: Surge in video meetings won’t beat physical contact
– Covid-19 shines spotlight on the ‘S’ in ESG (sponsored content)
– IR papers: How social media influences investors