Investor Relations Why investor relations? An individual is not likely to invest unless he/she understand fully what is likely to happen to that organization in future. Individual+Influence+Trust  Investment

Investor Relations Definition: Specialized part of company’s CC that builds and maintains mutually beneficial relationships with shareholders in maintaining and maximizing stock/market value. ……..Cutlip (1999)

Investor Relations Definition by Bursa Malaysia Investor Relations (IR) is that process through which a public listed company organizes and conducts itself in effective two-way communications with its shareholders, the financial community and other stakeholders with the objective of accurately representing the company, achieving a fair market value for the company’s securities and ultimately lowering its cost of capital.

Why IR Required in Malaysia? 1.It is in the Malaysian Code of Corporate Governance (2000). 2.Disclosure is part of the Listing Requirements. 3.Attracting new investors (both institutional and retail). 4.Keeping those you already have in place. 5.Helping analysts and the media understand your story. 6.Communicating with stakeholders in an efficient manner.

Issues that Need Disclosure 1.A change in shareholders which might affect control of the company. 2.A new issue of securities by the company, or a change in terms of existing securities. 3.Information concerning dividends. 4.A reorganization or reconstruction of the company. 5.Material on litigation and court decisions. 6.Mergers, acquisitions and other major corporate developments. 7.Significant company borrowings and ratings of those borrowings.

Contd… Issues that Need Disclosure 8.A event of default in respect of a material financial obligation of the company. 9.The acquisition or loss of any material contract. 10.Material on new products. 11.Material on changes in the company’s business, strategy and investment plans. 12.Quarterly reports of interim financial results, and the company’s annual audited accounts. 13.Other events that may be expected to have a material effect on the company’s operations, financial condition or future prospects.

Why is it Important? Full information and analysis helps; 1.investors to develop a well rounded understanding of the company and its strategies, 2.company can help achieve a fair market valuation for its securities, 3.create a body of investor support and a climate of favorable opinion. The result is a loyal shareholder base which gives the company the ability to approach its capital management exercises with confidence. Ultimately, this will be reflected in the demand for the company’s shares and the price of those shares.

Objectives Enhance value of company’s stock. Reduce cost of capital. Identify & enhance perception of an organization. Sustaining organization on issues that affects stakeholders values.

Ultimate Goal of IR To help management understand, enhance and manage the perception held by key audiences, including shareholders and the investing community, the media and, by extension, the general public, employee and opinion makers. Burson-Marsteller

Practices of IR Measuring opinion towards the company/organization. Recommend communication strategy Prepare financial literature Prepare and arrange informational materials Liaising with the media

Annual Report To reinforce credibility To establish distinct identity To build investors confident

How do IR help organization to build shareholder base & achieve full stock valuation? Effective communication Skillful presentation Timely dissemination

Survey on the Importance of IR 10 years agoPresent Very Important6.8%97.8 Fairly Important Neutral Of Little importance Not important Do not know4.50.0

Methods of communication with potential investors Answering telephone queries Meetings for individuals or small groups from the same organization Meetings delegates from different organizations Mailing information to potentials. Information on the internet (web-page). Information mail through electronic mail

IR support on data and information... Who assist IROs on these areas... nStock analyst nEconomist nSystems