Doha: Qatar Exchange (QE) has recently completed a detailed analysis of its listed companies’ investor relations (IR) practices.
The survey, which was carried out over a period of three months and involved all forty-two listed companies, is part of QE’s ongoing commitment to develop investor relations (IR) between the listed companies and their investors and shareholders. The survey is expected to be done on a recurrent basis.
The survey showed that over 80 percent of listed companies have, or are in the process of establishing, a dedicated IR Department. It also showed that about 70 percent of companies upload disclosures to their own websites in addition to using QE’s corporate news service and nearly 50 percent of the listed company community have the IR Department report to either the CEO or CFO.
Over 50 percent of listed companies regularly take part in investor road shows and 35 percent organise analyst calls and 35 per cent of the listed companies have a dedicated IR website (the remainder use their corporate site).
This survey results will act as a ‘baseline’ for future analysis while serving to highlight the necessary areas of focus for Qatar Exchange in working with its listed companies.
Director of the Listing Department, Abdul Aziz Al Emadi said: “IR at its core covers the ongoing activity of listed companies communicating with the investment community. While that communication is a mix of regulatory and voluntary activities, IR is essentially the part of stock market life where companies interact with all of existing shareholders, potential investors, analysts and journalists.”
He explained that the investor relations can come in many guises, for example, meetings with investors, company news-releases, annual reports and websites. He added that each method is designed to inform stakeholders about the company, so that they can gain a better understanding of the company’s business, its policies toward governance, financial performance and above all future prospects.
Key component
He described the IR as a key component of a listed companies’ communication strategy in today’s competitive market for capital. He pointed out that at a time when the retail and institutional investors, both here in Qatar and internationally, are focused on capital preservation, educating the investor base as to the merits of a companies’ investment story is becoming increasingly important.
“Qatar Exchange has been actively working with our listed companies for a number of years in the area of IR so this is not a new initiative; it is however a further development of our focus in this area,” he said.
“Our companies have made progress in a number of facets and we recognise the good work already put in but this survey provides us with a set of parameters with which we can benchmark progress over time. We are particularly concerned to ensure that the topic receives the necessary attention from the most senior management team. To be effective, the IR programme and those in charge of it must have the full commitment of senior management at Board level. This is particularly the case with corporate governance moving up the agenda in the region and here in Qatar”.
Qatar Exchange has identified two areas for immediate focus this year in order to support companies in (i) building a dedicated IR Department and (ii) developing a dedicated IR website.
On the first aspect, a Board often needs the support of a dedicated IR Officer and in larger companies perhaps a small IR Department.
The Board typically need support on preparing investor presentations, company announcements, website content and liaising with company advisors in this area.
The Board should regularly review the company’s investor relations strategy as well as re-evaluating whether the existing IR programme is meeting company objectives. The survey showed that already 80 percent of the companies have or are establishing such a dedicated department.
On the second focus area, in Qatar the continuing obligations for listed companies to provide timely information of a material nature to all shareholders has always been important within the regulatory regime. The development of the internet has given companies a practical way to manage such information provision.
The role of the company website therefore goes beyond just meeting regulatory requirements and is often the first point of contact between investors and companies.
As standards have risen so have investor demands and the quality of the information provision on an IR website is a strong guide to the attitude of the listed company to transparency and disclosure and its role as a listed company. Currently only 35 percent of the companies have such a dedicated website.
It is worth mentioning that QE have already hosted one major seminar in May to encourage the listed companies to build a dedicated IR Department. QE is also planning to hold another half-day seminar in Q4 to address the subject of a dedicated IR website.
In the coming months, QE will be delivering a dedicated IR training course in cooperation with the Middle East Investor Relations Society (“MEIRS”). These efforts and plans are part of QE’s support for this area, alongside industry professionals, as part of the on-going responsibility of Qatar Exchange to the listed companies and the broader market.
QNA
