Marianne Huve-Allard and her team had everything precisely planned for the roadshow in July. What they hadn’t reckoned upon was that London’s underground drivers would be on strike, causing traffic chaos and bringing the city to a virtual standstill.
Lucky for Huve-Allard that she wasn’t on a two-cities-a-day presentation timetable. The invited fund managers and analysts would not be gathering expectantly until the following morning. Nor was this a normal company out on the road for investor relations purposes.
In fact, Huve-Allard, investor relations manager at the Paris Bourse, had executives from four listed companies with her for this trip. The Bourse has been taking a select number of its listed companies out on investor relations roadshow presentations since 1993 and has built up quite a programme. This year the itinerary will take in London, Edinburgh, Amsterdam, Zurich, New York, Boston and Tokyo, among others – with two or more visits to some of the key centres.
Of course, in the 1990s there is nothing strange about stock exchanges taking their stories across borders. Many of the larger ones have seen international listings expand faster than their domestic markets and getting out on the road to woo interested parties has played a significant role. Witness the New York Stock Exchange and London Stock Exchange fighting over each other to court Chinese companies in recent times. The competition is not just about listings, of course; these profile-raising exercises can also build interest in the market among foreign institutional investors.
Huve-Allard believes that the Paris Bourse’s approach kills two birds with one stone: it increases international knowledge of the French market; and provides a service for its listed companies.
She also notes that offering the financial community an extra incentive to come along to the presentations works well for all parties. ‘We’re not just telling them about the Bourse,’ she comments, although that is an integral part of the package. The fund managers and analysts in the audience are getting the chance to hear four or five company presentations from senior executives at the same time.
‘We wanted to increase the proportion of foreign institutional investors in our market capitalisation and to have our listed companies better known outside France,’ explains Caroline Block-Roth, investor relations deputy manager at the Bourse, as to the reason for initiating the roadshow programme. ‘We were also thinking about European competition between the different stock exchanges and decided we needed to have contact outside our market.’
The Bourse’s roadshows are either organised in association with French brokers with a good client base in the centre being visited, or with locally-based brokers. For example, for the three-day trip to Tokyo this October, Nomura’s expertise has been called upon to help target the right audience for Coflexip, Lafarge, Rubis and AGF.
Huve-Allard stresses the importance of ensuring that the meetings have the right tone and the right companies for the fund managers and analysts present. In many cases, that means a common theme running throughout with the companies being carefully chosen by the Bourse and the relevant broker. Obviously, the broker picks client companies which it thinks have a good story to tell to the centre concerned.
The London meeting in July of this year centred around the first anniversary of the Midcac index and allowed four mid-cap companies to tell their story. And that is an added bonus. Many of the companies the Bourse has taken abroad do not have the budgets or time to do international investor relations but are more than happy to work on expanding their shareholder base when some extra help is being offered. The Bourse and the brokers cover the logistical costs while the companies pay for their own travel and accommodation.
Alain Camon, directeur financier at Havas Advertising in Paris, seemed very happy with the set-up for his London presentation. Although Havas is not a novice in visiting foreign institutions, Camon points out that for a mid-sized company it is not top of the list of priorities. He would like to do more on the investor relations front but finds himself restricted by time constraints, so the Bourse taking the initiative is more than welcome. He believes that the Bourse’s name backing the venture also gives more credibility than would a solo trip from a mid-cap.
The fund managers and analysts seemed to be impressed, too. ‘It gives me a chance to take a look at companies which might not otherwise come to my attention,’ comments one portfolio manager. A prime example on the Bourse’s July trip was cork manufacturer Sabat? which almost stole the show with its newly-developed cork. There aren’t too many foreign companies of a similar ilk regularly tapping into London’s financial community.
But it’s not just the Paris Bourse which has created investor relations services for its listed companies. Nor is it just small companies which can benefit from such programmes. The Bourse may be ahead of the rest in Europe but in the US Nasdaq and the Amex have both been running similar services for their listed companies for a number of years.
Ellen Hipschman Taverner, director of international marketing at Nasdaq in London, describes the investor relations services offered to companies as a natural extension of Nasdaq’s identity as a ‘customer-oriented’ stock market. ‘We have no delisting restrictions on our companies,’ she says. ‘The New York Stock Exchange has its Rule 500 which means that once you’ve listed it is very difficult to delist. We don’t have that, so we feel that it is important for us to address other needs that our companies have. When we heard from our companies that this was something they needed we put this programme together: at first just providing information and then actually bringing some of the companies over.’
Nasdaq runs a number of European investor relations programmes for its US stocks, including arranging one-on-ones, luncheon presentations and group meetings. London, Geneva, Paris, Frankfurt and Zurich are all regular ports of call. Hipschman concedes that it is impossible to arrange something for every company but says she’s keen to ‘bring over as many companies as possible and get them in front of as many fund managers as possible’.
Indeed, Nasdaq has arranged European roadshow tours for a wide range of its companies in recent years, from the big names – Microsoft, Intel and the like – down to mid-caps. There is an unwritten rule that only companies capitalised at $1 bn or more will get an invitation from the Nasdaq directors to join a roadshow because European fund managers are less interested in companies smaller than that.
Nasdaq has not put in place a similar programme for its non-US companies looking to do IR roadshows in the US. Hipschman does not rule that out for the future and adds that the market does all it can to help non-US companies in approaching the US financial community. ‘We feel that the importance of IR in the US cannot be overstated,’ she says. ‘In the early 1990s we realised that the concept of IR in the US was very different from anywhere else in the world. We felt it was our responsibility to educate our non-US companies about what they were about to enter into; and what was expected of them if they were going to be listed in the US.’
Janet Rogenstein, senior vice president of market development at the American Stock Exchange, is just as adamant that exchanges should play a part in developing their listed companies’ IR programmes. And she believes that the Amex has to look at every company individually to assess its IR needs and how the exchange might be able to help.
‘Our listed companies don’t have huge budgets for investor relations people so they are often looking for help,’ says Rogenstein. ‘The basic idea behind the service we provide is to help companies get their IR programmes going and to understand what investor relations entails.’
The Amex offers its companies a meeting with an investor relations professional as soon as they list on the exchange. A programme is then developed to help enhance visibility among institutional investors and analysts. Rogenstein says that the services of a number of IR agencies are called upon to help with this task.
‘We provide a lot of hands-on individual advice,’ she says. ‘We know there is no set way to work with a company and our programmes are tailored to suit each company’s needs.’ The programme of services includes targeted industry conferences, security analyst forums, corporate focus meetings and international forums. The Amex will also offer help in arranging a company’s roadshow if need be.
Much of the programme is centred around helping the companies reach out to the US investment community, although industry conferences and roadshows in Europe and Asia have also been arranged in recent times. As with Nasdaq, the international experience tends to be limited to those companies with a larger market cap. ‘We don’t extend that invitation to everybody,’ says Rogenstein. ‘It’s got to be the right match.’
It certainly seems to have done the trick for Graham Eacott, vice president of investor relations at Royal Oak Mines in Washington state. Eacott attended the Amex’s recent Gold Conference – the first for the sector – and says that it compared very favourably with other gold conferences which have been running for many years. ‘For an inaugural conference it was very well thought of,’ says Eacott. ‘It attracted a good institutional audience and had a lot of prestige. The total attendance was about 60 or 70, aside from those presenting. Investors look at the content of conferences and which companies are there before deciding whether to attend. The Amex seemed to get it right.’
Eacott extends his praise to the Amex’s IR efforts across the board, saying that the IR programme for listed companies is extremely proactive and helpful. He makes particular reference to the new InvestorLink program which the Amex launched earlier in the year to help its companies analyse their shareholder base and target institutions. ‘After the success of the conference they are now talking of taking a few gold companies to the Far East,’ he adds.
The Paris Bourse, Nasdaq and the Amex are not the only exchanges to offer investor relations services to their listed companies but they do remain in a select minority. The Vancouver Stock Exchange has made some roadshow trips in the past to help introduce its companies to foreign institutional investors but does not have an ongoing defined programme.
Other exchanges claim to run occasional programmes or at least don’t rule out the possibility of offering such services in the future. Thom Hoedemakers, head of communications at the Amsterdam Stock Exchange, says that for the most part individual companies want complete control over their own investor relations programme, although some medium and smaller companies have expressed an interest in the ASE providing some services. ‘We are thinking about it for next year,’ he says. ‘Up until now we’ve only done roadshows and presentations for the exchange itself.’
The New York Stock Exchange takes a similar tack: ‘We haven’t done roadshows for listed companies in the past although it is something we are open to in the future,’ says a spokeswoman. ‘It’s something listed companies have indicated they are interested in.’
Out of those polled for this article, only the London Stock Exchange completely ruled out offering investor relations roadshows to its listed companies. A spokeswoman pointed out that ‘London is a very big market. We serve the interests of the market as a whole, rather than the interests of specific companies.’
