Selling the Asia Story to Global Markets: It’s All About Context
‘Your Reality May Vary’: it sounds like a disclaimer at the end of a television commercial, and yet that simple phrase underlines the challenge facing heads of Investor Relations in Asia Pacific companies hoping to build the shareholder register in North America and Europe. But there are a number of actions IR leaders can undertake to better sell the Asia story globally, and to build the share register with key investors.
Perspective is a funny thing – we all have it, and yet what seems obvious to those based in Asian markets may not be so obvious to investors in London, or New York, or Frankfurt. So what can IR leaders do to help investors understand the realities of Asia Pacific markets, appreciating both the challenges and the opportunities?
Andrews Partnership brought together senior IR leaders from around the Asia Pacific region to focus on tried-and-test techniques for building investor knowledge of the region, generating more time in front of analysts, stronger and more data-driven analysis of Asian companies, and ultimately greater investment in the region’s leading businesses. The discussion identified several hurdles facing even the largest and best-known business in the region, together with potential solutions.
What are the challenges, and what are the solutions?
- Lack of understanding. Many IR leaders are spending a substantial amount of their time focusing on educating investors on some of the basic drivers of Asia Pacific markets. While analysts and investors understand the Asian growth story at a high level, many don’t have the time or inclination to dive into sector- and geography-specific trends, or understand the deeper nuances of doing business in this highly diverse region. IR leaders working to educate investors and analysts who follow their stock should use that foundation of understanding to build a clear corporate narrative that differentiates their own organisation from the broader regional trends.
- Lack of context: Even investors who have a deeper understanding of Asian lack the Asia Pacific perspective, and are understandably responding from the point of view of their more familiar home markets. For example, even analysts who track China closely are influenced by media and their own perceptions. IR leaders who successfully overcame this challenge used numbers – market size and opportunity size – to improve understanding, and also gave additional insights into business-specific issues.
- Comparisons: While IR leaders of fast-growing Asia Pacific companies are used to positive comparisons with Western markets, they’re at the receiving end of negative looks right now, with Europe and North America rapidly re-opening post-vaccination, and Asian markets largely staying closed. While there’s nothing IR leaders can do to affect the macro environment, they can push the positive narrative of their own businesses breaking the mould and growing amidst restrictions.
- Attention: While all IR leaders have been affected by reduced coverage in the wake of MiFFID II, Southeast Asian businesses in particular often face the double-whammy of reduced weighting in key indices. Progressive IR organisations are spearheading more aggressive investor outreaches, and more effectively using their own internal resources to target key investors.
- Standards: With plenty of attention on ESG, one of the challenges faced by Asia Pacific companies is that different investors are applying different standards to ESG disclosures, meaning that companies that rate well in their home markets may not necessarily do so in other global markets. It is incumbent upon IR professionals to work closely with their ESG function to ensure that key investor demands on ESG are addressed, both in terms of compliance and data flow.
What IR leaders should do
The pressure is now on Investor Relations teams – most of which are very lean – to become more creative in the way they meet investor data and insight demands, and in the way they drive engagement with the stock. Increasingly, businesses in the region are providing greater access not just to the CEO and CFO, but to leaders of key business units, both adding value to the investors, as well as spreading the burden of IR work, and building the capacity and experience of the next generation of senior executives. Inasmuch as IR teams have been using video meetings extensively over the past 18 months, they are now exploring what face-to-face investors meetings should be scheduled, particularly given that their peers in Europe and the US are making the switch back to in-person meetings.
The challenge of perspective – what seems obvious in Asia may not be obvious when seen from abroad – remains, but committed IR leaders are innovating to overcome the issues of context, and are positioning themselves and their teams to sell the next wave of Asia Pacific growth to global investors.
Andrews Partnership are the reputation experts, with offices in Hong Kong and Singapore working across Asia, as the leading specialist corporate affairs, communications and investor relations executive search firm. We excel at understanding each organisation's unique challenges and appointing the right talent, who make meaningful business impact.