Africa Investor Magazine Survey Results on Investor Relations in Africa - March 2010
In February, Africa Investor, a premier provider of investment data, research, broadcast and published content to the investment community in sub-Saharan Africa invited me to participate in its survey on investor relations practices on the continent. The results which are published in the March edition of the magazine reveal a growing interest in the field and sharpened focus among practitioners on the issues they need to tackle for IR in Africa to assume the respected stature it enjoys among its peers in developed markets.
Catherine Wright of Africa Investor’s Johannesburg office co-ordinated the survey. Read More…
Fending for Themselves: Who’s Looking out for Shareholders?
This week on Street Talking in NEXT, I deplore the atrocious treatment retail investors regularly receive from companies on the Nigerian Stock Exchange.
In his immensely entertaining account of the global economic meltdown, Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis – and Themselves, the author, Andrew Ross Sorkin, who is also the chief mergers and acquisitions reporter of the New York Times, describes a charged scene during a Lehman Bank board meeting held in July 2008. As the bank struggled to raise capital, Dick Fuld, its mercurial chief executive, invited Gary Parr, vice-chairman of Lazard Frères, the venerable investment bank, to provide his board with objective counsel on alternatives. Soon after the session began, Fuld felt that Parr was using it as an opportunity to ‘shamelessly plug’ Lazard’s experience with such Armageddon scenarios. Quickly, Fuld cut Parr off and thanked him for coming. Later that day, he telephoned the Lazard banker and threatened to fire him. The unflappable Parr replied, ‘that may be hard because you haven’t hired us yet.’ I enjoyed reading that story. Read More…
Charts Hypochondriasis: A Panacea for Uppers and Downers Addiction
This week in Alrroya, the United Arab Emirates (UAE) business and financial daily, I urge public companies to reclaim their mandate in providing guidance to investors on their value generating potential from the tyranny of end-of-day stock price league tables.
I am not a huge fan of market closing price league tables. I studiously ignore titles like ‘Today’s 10 Bottom Stocks,’ ‘5 Leading Losers,’ ‘10 Market Chargers,’ ‘10 Exchange Laggards’ on the Markets pages and financial websites. These companies are not in any competition with each other in that sense. I am not aware of any chief executive that purposely determines that his company stock should rise the most or fall the least on any given day. Read More…
Different or Indifferent: Politics Does Matter After All
This week on Street Talking in NEXT, I take a step back from my parochial interests in investor relations and shareholder issues to trace the tight relationship between sound judgment among the political leaders and national economic progress. My inspiration has been the realization that even with the most enthusiastic and sincere efforts by companies, the responsibility for creating an enabling business environment lies with the government. If the government fails in that task, or the politicians deny that duty, then no matter the commitment of companies and the capital that investors are willing to pump in, the economy will not reach its full potential, ultimately hurting shareholders in the long run.
Today, my story begins with the unlikely case of Brazil. By the way, my interests have not shifted to football. Nonetheless, it is still a bit of deviation from my usual neck of the woods. First, a little bit of background to provide some colour. Read More…
The Value Additive Content of Executive Media Interviews
This week in Alrroya, the United Arab Emirates (UAE) business and financial daily, I champion the beneficial role that media interviews can play in raising the profile of companies among the investment community and addressing malignant information asymmetry.
Most public company executives regard media interviews as a distraction. In their view, they would rather be running their companies. As far as they are concerned, there is a dichotomy between minding the store and talking about the store. Read More…
The Scorecard Aesthetic: Rethinking Annual Report Design
This week on Street Talking in NEXT, I discuss the importance of design in encouraging shareholders to actually want to study annual reports, which is indispensable if they are to understand the business environment, strategy and operations of companies enough to hold boards accountable.
Collecting annual reports is my pet passion. For Christmas, my partner gave me the 2009 edition of the Graphis Annual Report, a coffee-table worthy tome of report design, which I had long fantasized over. At my local post office, I have gained some notoriety for receiving cartons of annual reports from all around the world. I enjoy studying the layout, language, typography, colours, photography, illustrations and paper. At home, I have a room stacked to the ceiling with reports. Just looking at them in that rainbow array is as visually satisfying to me as any aficionado’s art collection. Read More…
Investor communications and disclosure: It’s Broke. Let’s fix it
This week in Alrroya, the United Arab Emirates (UAE) business and financial daily, I discuss the role that robust disclosure rules can play in averting a repetition of the turmoil that has engulfed the market in the past two years. I have no doubts that the markets would pick up again, but if shareholders fail to draw the right lessons from past experience and companies refuse to change their ways accordingly, then it is only a matter of time before we have another panic season on our hands.
All fingers have been burnt, but some are more charred than others. Across the world, what started as a localized US sub-prime crisis, and later snowballed into a global credit crunch, has not been good to shareholders. While business partners, customers, employees and host communities have all been hit by the turmoil, shareholders have borne the brunt of the pain. They were the first in and it is now clear that they will be the last out. Read More…
Signal versus Noise: Scrutinizing Share Buybacks
This week on Street Talking in NEXT, I share my reservations on the acclaimed merits of recent capital structure reconfigurations, especially share reconstructions and buy-backs by companies on the Nigerian Stock Exchange. In place of these unproven merits, I urge companies to focus, instead, on other less discussed, but surer benefits of such programs for shareholders.
Equity overhang is the new leprosy. On a single day last week, the papers carried reports about Investment & Allied Assurance’s share reconstruction plans and Custodian & Allied Assurance’s intention to buyback 5% of its outstanding shares through an open market repurchase program. Two months earlier, Goldlink Insurance had completed its own share reconstruction discipline. This week, one paper carried the headline ‘Low Share Prices - Firms Embrace Share Buy-backs’.’ Are we entering an enthusiastic era of aggressive buy-backs? Is stock-swamping an odious condition? Read More…
Growing up in frontier markets
This week in Alrroya, the United Arab Emirates business and finance daily, I discuss the demands by international fund managers on public companies in frontier markets like Nigeria to improve their corporate governance and risk management processes.
Frontier markets like Ghana, Kenya and Nigeria are being forced to grow up. Their indulgent childhood is fast coming to an end. Global investors have lost their patience and expect companies in these fringe economies to begin to act like adults. That means that they will be held to the same accountability and responsibility standards as their developed market peers. Companies in these emerging emerging markets can no longer serve as capricious extensions of the personal piggy banks of the founders or government. This should come as no surprise. To a keen observer, it was only a matter of time before the petting ended. Read More…
Inglorious Bastards: Adoption Procedure for Orphan Stocks on the Nigerian Stock Exchange
This week on Street Talking in NEXT, I discuss the challenges small- and mid-cap companies on the Nigerian Stock Exchange face in attracting and sustaining investment community attention. I conclude with a number of recommendations.
Initial public offerings and listings are very exciting events in the life of a company. Endless consulting sessions with advisers, regulatory filings, travel logistics for road shows, analyst presentations and PR campaign vetting impress on insiders that the company is crossing an historic threshold. Read More…
Recent Comments