Stock markets hit record highs in 2024, powered by falling interest rates and, more recently, expectations for business-friendly polices under US president-elect Donald Trump.
The macroeconomic environment, however, feels highly uncertain, with talk of trade wars back on the agenda and geopolitical tensions simmering across the globe.
Amid this complex environment, it’s becoming harder to understand what’s driving corporate valuations and the best way for IROs to tell their unique story.
IR Magazine recently held a webinar, in partnership with Breakwater Strategy, to explore shifting market dynamics and provide advice on how IR teams can remain agile as they engage with key stakeholders.
Click here to watch a replay of the webinar.
‘We're seeing unusual complexities from geopolitics [and] trade flows, in addition to multiple uncertainties that are typically at play,’ said Chandrika Nigam, former senior director of IR at Adtalem Global Education.
‘As an investor, I now actually need to move away from a single model or maybe two or three to maybe five, six or seven ways to think about a company,’ commented Mark Hayes, partner and head of capital markets at Breakwater Strategy.
Pramit Mukherjee, senior director, investments at Legal & General America, discussed what is top of mind for generalist, long-only investors in today’s market.
‘When you have somewhat challenging macro, like we have right now, and a lot of companies are going through different forms of transition, be it business transition or management transition or reorganization or restructuring, that's when investors are sometimes left in a limbo as to what should they assume for a certain company for a certain metric,’ he said.
‘They're not getting the information directly from management. And there tends to be always a gap and a sort of a tension between what the buy side expects and what they're hearing from the IRO.’
All the panelists offered tips to the audience of IR professionals about how best to navigate the current market environment.
Nigam said IROs should aim to be ‘strategic drivers’ within the business who create a ‘ripple effect’ across the company.
‘You're highlighting key value drivers to your team, to your management, and effectively taking them to your investors,’ she said. ‘That lets you adapt your investment thesis as environments change.’
Hayes, meanwhile, offered three steps IR teams can take: ‘I would do an inventory of the macro conditions that I think my company will operate in over the next 12 to 24 months, and really put pen to paper in that scenario-based context,’ he said. ‘That will really help me understand two things: where am I going? Where is the investor going?
‘The second is, I have seen a bewildering array of innovation in the investor communication and engagement space… That is really fundamentally changing the way that we think about [how] public companies communicate and engage with investors. And the third is… let's think about, reimagine and reinvent our roles based on that future.’
To watch a recording of the webinar, click here.
