Australian buy side wants early results announcements

Oct 08, 2013
<p>Majority of fund managers and analysts would prefer financial results before trading begins</p>

Buy-side analysts and fund managers want listed Australian companies to announce their financial results before the share markets open for morning trading, according to the Australasian Investor Relations Association (AIRA).

More than 71 percent of respondents to AIRA’s poll say they would prefer any financial announcements to be made public before 8.30 am, as is the case in most foreign equity markets. AIRA’s chief executive, Ian Matheson, says the poll has provided a ‘clear message’ both for companies and the Australian Securities Exchange (ASX).

Matheson adds that the poll’s participants ‘prefer to read and analyze earnings numbers earlier in the day, so that during hectic profit reporting seasons they can be better prepared before share trading commences and ahead of company briefings. We hope this feedback encourages more listed entities to act.’

Recent changes in practice at the ASX mean preopening announcements can be made, as some Australian companies have already shown. But many retain the practice of holding board meetings to guarantee sign-off for any profits results immediately before they are released, despite new disclosure rules rendering this unnecessary.

AIRA’s poll also finds that 61 percent of analysts and investors do not have a strong preference for how a company chooses to make results presentations, as long as there is an opportunity to ask questions of the firm’s chief executive. The association adds that face-to-face meetings with a company’s CEO and senior management may no longer be necessary in light of this information, despite being a long-running and widespread practice.

‘Clearly, analysts and fund managers are saying it is a more efficient use of their time to hold these briefings virtually – by webcast or conference call,’ says Matheson. ‘They still get to hear the CEO and ask questions, but they don’t have to run around town to different meetings. Time is critical to them and the benefit to the company is that when shares commence trading, the market has already absorbed and understood the results.’

Matheson maintains, though, that some firms may still prefer face-to-face briefings if, for example, they have a large retail shareholder base or they have only recently been listed.

Sixty percent of respondents would also like companies to disclose any consensus profit forecasts to the ASX, even without being required to by existing regulation. Of these, 39 percent add that such forecasts should be published on a company’s own website. 

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