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MALAYSIAN INVESTOR RELATIONS ASSOCIATION
MIRA AWARDS SURVEY RESULTS
2014/2015
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This report was prepared by NASDAQ OMX Corporate Solutions International Limited (“Corporate Solutions”) for the Malaysian Investor Relations Association. While we have
made every attempt to ensure that the information contained in this report has been obtained from reliable sources, Corporate Solutions is not responsible for any errors or
omissions, or for the results obtained from the use of this information. All information in this report is provided "as is", with no guarantee of completeness, accuracy, timeliness or
of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance,
merchantability and fitness for a particular purpose. Nothing herein shall to any extent substitute for the independent investigations and the sound technical and business
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reliance on the information in this report or for any consequential, special or similar damages, even if advised of the possibility of such damages. Apart from any fair dealing for
the purposes of private study, research, criticism or review, as permitted under copyright legislation, no part of this report may be reproduced or re-used for any commercial
purposes whatsoever without written permission from Corporate Solutions.
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TABLE OF CONTENTS
1 IR IN MALAYSIA: INVESTMENT COMMUNITY VIEWS 3
IR BEST PRACTICES RECOMMENDATIONS 8
2 METHODOLOGY 9
3 MIRA SURVEY RESULTS 12
4 CONTACTS 23
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1. IR IN MALAYSIA: INVESTMENT COMMUNITY VIEWS As investors get a bit more sophisticated, information requirements become different. IR professionals definitely are a lot more informative than before. They are a lot more involved in providing numbers. It used to be a time where CFOs were doing all of this stuff. IR people are now stepping up and doing this. They’ve definitely come a long way. Anonymous Investor, Growth Fund Manager, Malaysia Ahead of the 2015 Malaysian Investor Relations Awards
Ceremony, the Nasdaq Global Perception team
canvassed the financial community - buy-side and sell-
side professionals - to gauge the evolution of the
investor relations function in Malaysia. Our interactions
with fund managers and analysts were conversational in
nature, though we utilized a structured question
framework to effectively unearth insights and capture
themes. The study revealed several key items
companies can consider to meet the evolving demands
of the domestic and global marketplace. Additionally,
we observed slight, but noteworthy variations in our
current results versus the 2014 findings.
THE CHANGING FACE OF IR
Historically, Malaysian investor relations professionals
were primarily focused on the dissemination of
information related to financial results and Company-
specific news. As the investment community and
regional corporates have become more sophisticated,
the role of the investor relations officer has evolved. In
more recent years, IR departments have become
involved in a wide array of company initiatives,
including keeping abreast of developments in the
competitive landscape as well as measuring the
effectiveness of strategic initiatives and corporate
actions. Per the investment community, this level of
engagement in the business has certainly enhanced the
quality of IR’s interactions with the Street. In particular,
investors and analysts highlighted the improved
transparency in their communications.
Another noteworthy observation from our outreach
efforts is the ongoing dialogue that IR professionals
have maintained with the marketplace, which our
research has shown can have a profound impact on
attracting a stable and growing shareholder base.
Ultimately, IR efforts and overall corporate messaging
can influence the company’s trading dynamics and long-
term valuation. As such, investment professionals are
demanding an even greater level of engagement and
accessibility to the investor relations team. To that end,
study respondents indicated that interactions with IR
representatives are taking place on a weekly basis at a
minimum, and in select instances, communications are
occurring daily.
Finally, we explored how the practice of IR in Malaysia
compares to other regions. Interestingly, select
respondents noted that Malaysian-based IR teams are
overly focused on the domestic market, and need to
extend their outreach strategy to other regions.
They are being more transparent and they are giving
more and additional information disclosure. Anonymous
Sell-side Analyst III
They’ve gotten more informative, very helpful and very
engaging as well. For example, when you request a
meeting they are more engaging and more willing to
meet us. Anonymous Sell-side Analyst VIII
I believe they have improved their websites, the investor
relations websites, so there is more information in it.
Anonymous Investor, Growth Fund Manager, Malaysia
It is still evolving. There is still room to improve, but for
now, it is better. Anonymous Sell-side Analyst VII
It depends on the company. I work in Singapore, so
some companies pay less attention to analysts outside
of Malaysia. That is my feeling. Companies like UEM
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Group and Gamuda, that problem is not there. They are
very responsive. However, for a lot of other companies,
I don’t think they really pay that much attention to us.
Anonymous Sell-side Analyst IV
I interact with IR professionals almost every day.
Anonymous Sell-side Analyst II
I interact with IR professionals on a weekly basis, maybe
about three times a week. Anonymous Sell-side Analyst
VIII
I interact as often as necessary, depending on news flow
or corporate events. In general, it is at least once a week
with a member of IR. Anonymous Sell-side Analyst VI
THE WELL-ROUNDED IRO
During our conversations with the investment
community, we found that the three most commonly
cited IR attributes are:
Understanding of the business and the industry
Timely responses to investor and analyst queries
Clear and concise articulation of information
Additionally, on a global level, we have found that a
firm grasp of the various market conditions and other
external drivers that impact stock performance is
essential for all IR professionals. Further, crafting a
message that resonates with key stakeholders, as well
as providing detailed responses to questions posed by
the investment community, are viewed as critical skills
that are useful for the IR function. Adhering to such best
practices assists investors and analysts in understanding
the intrinsic worth of a company.
As for year-over-year trends, the vast majority of the
cited attributes in our latest outreach effort were
aligned with the results of the 2014 “IR in Malaysia”
study. That said, this year, respondents did not call
attention to the importance of presentation materials,
but mentioned the proximity of IR to the executive
team as an important factor.
Additional favorable IR characteristics cited by
respondents include:
Strong interpersonal skills
Accessibility
Transparency
Credibility
Approachability
It is its effectiveness in terms of getting the information
as well as communicating the information. It also needs
to be communicated in a timely fashion. For instance, as
investors we want to try to get the information as soon
as possible when it is available. Anonymous Investor,
Emerging Markets Fund Manager, Malaysia
They should have deep knowledge of the company, a
willingness to explain, and good disclosure of
information. Anonymous Investor, Deep Value Fund
Manager, Singapore
They must have a quick response time. They definitely
need to be somebody you can trust. They also should be
someone who is very knowledgeable of the industry.
Anonymous Sell-side Analyst IX, Malaysia
MEASURING IR EFFECTIVENESS
As the investor relations practice has evolved into a
strategic discipline, IR performance metrics and
evaluation methods have higher adoption rates. To that
end, the majority of investors and analysts polled
believe that evaluating IR’s effectiveness is more
subjective and offered various opinions on how to
gauge how well IR is performing. The most commonly
cited approach to measure effectiveness is direct
feedback from the investment community. This echoes
the sentiment expressed in our 2014 study. Participants
indicated that this feedback can be collected either
through direct communications with the company, or
through third-party perception providers. A small
pocket of respondents believe that an effective method
of measuring an IR team’s effectiveness is by analyzing
the performance of the stock. According to these
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investment professionals, the objective of investor
relations is to obtain recognition in the market for the
value a company is creating; thus, there should be a
direct link between the effectiveness of those efforts
and stock trading dynamics. However, this approach
certainly has limitations, as a number of other variables
can influence stock performance and it is often difficult
to quantify the impact of various contributions.
As for specific metrics used to evaluate performance,
study participants noted the level of shareholder
engagement, the quality of communications, and the
overall responsiveness of IR, as the optimal indicators of
a successful IR effort. Lastly, respondents believe IR’s
performance during crisis situations, including major
business setbacks or challenging macro-economic
cycles, is the most indicative measure.
Price performance is one of them I guess, but I don’t
think it should be the only measurement. They can’t
really control the market per se. Anonymous Investor,
Growth Fund Manager, Malaysia
I have a lot of IR friends. I always tell them their bonus
should be according to the market capitalization. I mean
if you are doing a great job, the share price goes up and
the value of the company increases. I suppose that is the
best measure. Anonymous Investor, Growth Fund
Manager, Malaysia
The best way to measure IR effectiveness is by feedback.
I don’t think it is measureable by numbers. Anonymous
Investor, Growth Fund Manager, Malaysia
It’s not just based on the share price. I think there is
need for these surveys and also the annual feedback
from the investment community. That would be the best
way to measure their performance. Anonymous Sell-side
Analyst III, Malaysia
The real test of the IRO lies in adverse circumstances.
How the company responds in a negative set of
circumstances is key. In good times everybody is happy
and nice and everything is well. For me, what is
important is in how they react in a negative scenario.
Anonymous Investor, GARP Fund Manager, United Arab
Emirates
QUALIFICATIONS FOR AN EFFECTIVE IRO
In general, while select respondents believe that
possessing a financial degree can contribute to the
overall effectiveness of an IRO, the majority of
investment professionals surveyed do not view it as a
necessity. Rather, investors and analysts believe that
industry experience trumps any advanced academic
certifications. The underlying view is that it is optimal
when an IR professional has an industry-specific
background or has had experience in the capital
markets, as a buy-side or sell-side professional. In the
latter case, IR professionals would already have a
working knowledge of Company financials.
Actually, I don’t think that really matters (degrees or
certification). I think the most important is if their
previous job experience was in corporate or in
investment banking. That really helps a lot because that
will help them to better understand what other
information that the investor community needs.
Anonymous Sell-side Analyst III, Malaysia
There are many degrees, but I would say a good quality
is having a finance background, understanding the
financial numbers, the accounting standards, and the
legal perspective. A good finance degree would be very
much relevant. Anonymous Investor, GARP Fund
Manager, United Arab Emirates
There are no qualifications required, but an
understanding of the business and industry is important.
Anonymous Sell-side Analyst VI, Malaysia
Obviously, an IR person should have a deep knowledge
of the company they are representing. In this case,
experience from buy-side positions so they know what
questions we are going to ask. Anonymous Investor,
Deep Value Fund Manager, Singapore
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IMPACT ON VALUATION
In our global perception studies, it has been widely
acknowledged by investors and analysts that a high-
quality IR team can have a significant impact in the
market, and can be a strategic asset of a publicly traded
company. While select study respondents believe that
IR’s impact on valuation in the Malaysian market is
marginal, the majority of investment professionals
surveyed believe that an effective IR program can
contribute 20% to 30% to valuation. In our 2014 “IR in
Malaysia” study, investors and analysts indicated that
the quality of an IR program could potentially impact
stock price by as much as 30%-40%.
By and large, participants believe that if a company is
transparent and has a high-functioning IR program,
these could be the determining factors in how a
company is perceived in the marketplace and ultimately
influence future investment decisions. Among the
pocket of respondents that don’t believe the efforts of
IR play a significant role in how a company is valued,
consensus is that IR does not contribute to revenue
generation, so there is no direct impact on the business
performance and how a company is valued by the
marketplace.
When we talk about IR, we are talking about the basic
visibility of the company. I think somehow it does affect
the company’s performance in terms of stock price. The
company that is more visible which is related to the IR
roles, tend to perform better. This is just general talk, so
I think it is quite crucial. Anonymous Investor, Emerging
Markets Fund Manager, Malaysia
It is quite important. If you want us to assign a
percentage to that, I think it would be 20% to 30%.
Anonymous Sell-side Analyst III, Malaysia
It is really the company’s fundamentals, but
transparency would improve how you value it. So it
would be maybe 20%. Anonymous Investor, Growth
Fund Manager, Malaysia
Its impact is maybe less than 10% because IR only gives
us insight. We also look at other information in the
market other than what IR gives us. Anonymous
Investor, Fixed Income Security Analyst, Indonesia
It is not a direct contribution. I don’t value the company
based on what IR contributes. I don’t know what
percentage they would be responsible for because I
don’t actually forecast an IR contribution in my
valuation. Anonymous Investor, Growth Fund Manager,
Malaysia
CURRENT CHALLENGES FACING IR
As the fight for investment dollars intensifies, so do the
demands placed on an investor relations professional.
The 2014 MIRA study revealed that amongst companies
with smaller market capitalizations, the role of an IRO
and the IR function in general, was dwarfed by more
pressing operational obligations. However, in our
recent study, we have found that amongst mid-sized
and larger companies, management teams have
acknowledged the growing importance of having a
dedicated IR effort. Per study participants, while the
overall performance of investor relations professionals
has improved, there are areas of the function that can
be enhanced relative to performance levels in other
regions. Specifically, Singapore, Indonesia, and Hong
Kong surpass Malaysia in their disclosure practices. In
general, respondents believe that IR teams based in the
aforementioned regions have more exposure to
international investors and are accustomed to providing
a greater level of detail in their communications.
Other regions, it would be more to do with the macro
challenges which Malaysia faces because of declining oil
prices and how it impacts their business and how they
can explain it. These are the things which are at times
not in their control and they are not able to fully
understand the implications. Anonymous Investor, GARP
Fund Manager, United Arab Emirates
It is quite similar actually. Perhaps the pool of investors
is more domestic. If it’s someone in IR in Singapore or
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Hong Kong, it could be a more international kind of
flavor in terms of interactions with analysts or fund
managers. Anonymous Investor, Growth Fund Manager,
Malaysia
I guess they disclose less. It is regulatory issues between
different countries, but generally Malaysia discloses less
than Indonesia. Anonymous Sell-side Analyst II,
Singapore
It is the knowledge of the company, the information that
they know and their interactions with fellow fund
managers and analysts. Anonymous Sell-side Analyst
VII, Malaysia
8
IR IN MALAYSIA: IR BEST PRACTICES RECOMMENDATIONS
In sum, we fully recognize that companies are at various stages in their investor relations journey; however, there are
prevailing themes that emerged from our conversations with the investment community. As such, we call attention to
the following actionable takeaways over the past 12 to 24 months for Malaysian publicly traded companies:
Finance background/Industry experience preferred. Investors and analysts appreciate IR professionals that
have an in-depth knowledge of the company and industry in which it operates. Further, the investment
community has a strong preference for IR professionals that can speak their language and are a reliable proxy
for executives. However, while having an academic background in finance and/or accounting allows for in-depth
conversations around company financials, investment professionals are also becoming increasingly more
cognizant of the impact that industry experience can have on the overall effectiveness of an investor relations
professional. Experience in the respective sector or directly within the business can set IR professionals apart
from peers, as these individuals can often provide more granularity around various segments of the business,
not just a high-level overview.
Conduct formal perception study on an annual or biennial basis. Investment professionals continue to view
direct feedback on IR performance as an important tool to gauge effectiveness. To that end, it is essential to
have an unbiased and unfiltered view of investor perceptions across a wide variety of corporate performance
metrics, including IR, management, investment proposition, and overall strategy comprehension. Such candid
feedback can help IR professionals to understand what aspects of IR are done well and should be maintained.
Additionally, this type of outreach effort can provide actionable takeaways on how to enhance IR and the overall
perception of their company in the marketplace. If perception studies are conducted regularly, companies can
easily track progress against historical performance and industry benchmarks.
Improve the level of disclosure in communications. Financial reporting and disclosures are essential means for
management to communicate past and forecasted business performance to the public markets. As such, it is
critical for companies to be transparent and straightforward in the details provided to the Street. Companies
can explore various avenues to provide a helpful financial picture, including non-deal roadshow presentation
slides, broad-scale Street-facing events, and general one-on-one or group discussions with Company executives.
Additionally, management and IR can infuse best practices into their earnings calls, press releases, and the
corporate website, in order to establish a greater level of credibility with the investment community.
Proactivity is paramount. In our interactions with industry professionals across various sectors and regions of
the capital markets, we have continually found that investors tend to favor companies that take a proactive
approach to interacting with the financial community. Companies can address changing dynamics in the
macroeconomic, regulatory and competitive landscape on conference calls, at industry conferences, on
roadshows, as well as during its normal outreach activities to the financial community. Additionally, we certainly
understand how challenging it can be to effectively prioritize management’s time; however, it is critical that the
Company carve out time to visit top shareholders and key prospective investors on their own turf at least once a
year. The current Malaysian macro environment underscores the importance of proactively addressing any
concerns that might be top of mind for investors and analysts.
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2. METHODOLOGY
In total, we invited over 2,200 investment professionals to take part in the 2014/15 Malaysia Investor Relations Association Survey. The invitees were comprised of portfolio managers/buy-side analysts who invest in the region, and sell-side analysts currently covering stocks in the region. The target audience was geographically diverse, with
the core breakout of participating firms being:
All respondents were encouraged to participate via
Nasdaq Global Perception’s online survey portal.
Additionally, we issued soft copy questionnaires and we
received select responses via email. When voting,
participants were asked to rank up to three companies
for overall quality and direction of their IR program, and
separately rank up to three IR professionals, CEOs or
CFOs. No votes for the same firm or individual were
allowed to be cast more than once.
In total, 211 qualifying responses from 74 separate
organizations (buy-side and sell-side) were received.
Responses were only accepted from qualified
individuals at brokerage firms/asset managers, and
virtually all responses came from individuals in our
original target audience list.
All responses were then treated as follows in order to
calculate results from each category:
Votes from multiple individuals at the same
company were accounted for separately in all
cases where multiple individuals had voted in
the same category
All votes were weighted to score a first place
vote as 3 points, second place as 2 points and
third place being worth 1 point
Votes were then additionally weighted:
Brokerage votes were weighted based on a
combination of the respective analyst’s
Starmine ranking (whereas a ranking of 5 stars
translated to a weighting of 5 points, a 4-star
rating translated to a weighting of 4 points and
so on to a 1-star rating translating to a
weighting of 1 point) as well as the coverage
universe for the respective analyst (whereas a
coverage universe of 13+ related companies
translated to a weighting of 5 points, coverage
of 10-12 companies translated to a weighting of
4 points and so on to a coverage universe of 1-3
companies translating to a weighting of 1 point)
Buy-side votes were weighted by equity assets
under management ($EAUM) for the respective
firm whereas $EAUM in excess of 10 billion
translated to a weighting of 5 points, $EAUM in
the range of 6-9 billion translated to a weighting
of 4 points and so on to $EAUM of <1 billion
translated to a weighting of 1 point
BROKERAGE (sell-side)
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FUND MANAGEMENT (buy-side)
When the buy-side or sell-side take part and vote for
their leading IR performers, either for a company
overall, or for individuals, experience tells us that the
selection(s) can be influenced by a wide range of skills
or attributes. Due to this range of factors, and because
different skills or capabilities are prioritized differently
by different people, we specifically ask for an overall
rating, rather than separate scores for each attribute.
However, from the wider data we receive, and how
buy-side and sell-side evaluate IR, the key aspects taken
into account when voting are as follows:
BEST COMPANY FOR IR – buy- and sell-side voters take
into account the following qualities:
Informative meetings
Communicating clear strategy
Frequent road-shows
Transparency
Access to senior management
Good disclosure
IR PROFESSIONAL - investors and sell-side analysts
value:
Knowledge of the business
Transparency
Responsiveness
Accessibility
Proactive efforts
CEO AND CFO BEST FOR IR - the most important
aspects for voters are:
Accessibility
Execution
Strategic vision
Articulation of strategy
Credibility
IR WEBSITE - investors use and value in their job the
following features:
Presentations
Webcasts
Email alerts
Calendar synchronization
CORPORATE GOVERNANCE – principles most valued by
investors include:
Rights and equitable treatment of shareholders
Interests of other stakeholders
Role and responsibilities of the Board
Integrity and ethical behavior
Disclosure and transparency
ANNUAL REPORTS – investors and analysts value:
Ease of finding information and clarity
Granularity and clear exposure of the value
drivers. Investors and analysts look for
consistency within reports in the way detailed
numeric information and breakouts are
classified and presented, as well as being able
rapidly to evaluate the key components of
revenue and earnings
How well the corporate story is expressed.
Ultimately, investors will decide on an
investment based on the degree of
commonality between what a company
projects, and what the realities are on what it
delivers. In this, the position of the Report &
Accounts as a fundamental building block in
forming perceptions cannot be understated
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ONE-ON-ONE MEETINGS – aspects of one-on-one
meetings most valued by investors include:
Q&A sessions
CEO/CFO exposure
Specific company insights
Corporate presentation
BUSINESS KNOWLEDGE OF IR TEAM
Sector/industry knowledge, on a local or
regional basis, but increasingly in a global
context too
Proactive service & responsiveness; getting
back to analysts & the buy-side on their
questions
Ability of IR team to work together, and to act
as genuine spokespeople for executive
management
MOST IMPROVED IR
The IR team which has developed the most in terms of
its efforts with the investment community, based
mostly on the previously mentioned attributes and
activities.
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3. MIRA SURVEY RESULTS MAIN BOARD - LARGE
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MAIN BOARD - MID
15
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MAIN/ACE MARKETS - SMALL
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MAIN/ACE MARKETS - MICRO
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MAIN BOARD – ALL COMPANIES
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4. CONTACTS Nasdaq Global Perception
195 Broadway, 9th Floor
New York, NY 10007
Foli Pontillo
Global Head, Nasdaq Global Perception
P. (212) 312-0372
Collin Testamark
Director, Nasdaq Global Perception
P. (212) 312-0371
