Capital Markets & Investor Relations

IR Monitor – 18th January 2021

Investor Relations News

We begin by looking at the importance of building meaningful relationships with retail investors. We then turn to a review of capital markets in 2020 from the London Stock Exchange Group. Then, we discuss the City of London Corporation’s post-pandemic recovery plan to ensure the Square Mile remains an attractive location in the years to come. We also examine the potential regulatory and growth risks for social media companies following the suspension of President Trump online. In addition, we note the potential areas that President-elect Biden’s likely S.E.C. pick, Gary Gensler, will seek to regulate come January 20th. And finally, we ask, will appropriate office attire for men ever include shorts?

This week’s news

Building meaningful relationships with retail investors

Last week IR Magazine hosted their ‘Building meaningful relationships with retail investors’ event. The webinar focused on how the shareholder bases have changed to reflect an increase in retail activity which has been accelerated by the coronavirus pandemic. According to Jeff Lambert, CEO and Founder of TiiCKER, retail investors provide significant value by their brand loyalty combined with their tendencies to be long term holders and to vote with management, and thus they should no longer be treated as an afterthought in IR strategies. Gay Kaylor, Head of Stockholder Relations at The Hershey Company, highlighted the challenge of engaging with retail investors due to their varying levels of technological fluency. Kelly Reisdorf, Chief Communication and Investor Relations Officer at Vista Outdoors, pointed out that education communications is imperative and should be as transparent and simple as possible, noting that even institutional investors’ attention spans are decreasing.

2020: A record year for capital markets

It may have been a stagnant year socially but the London Stock Exchange Group’s review of 2020 has revealed the extent of activity in the capital markets. In a record year for London Stock Exchange Secondary Markets, £4.9bn was traded each day on average with a record daily turnover of £12.8bn on 27 November. AIM continued to drive growth market capital in Europe, whilst the FTSE AIM All-Share index hit its highest level since August 2007. 814 bonds were issued on London Stock Exchange during 2020, raising £547bn, a 56% uptick in issuance compared to 2019.

City of London looks beyond Covid 

In a report seen by the Financial Times, the City of London Corporation’s ‘recovery task force’ has set out more than 100 different proposals to ensure that the financial district remains “internationally competitive and locally vibrant” in the years to come. This plan has taken on an increasing importance amid the twin threats of Brexit and the pandemic to London’s pre-eminence as a financial centre as well as its local hospitality industry. The FT reports that the Square Mile intends to foster growth in sectors such as green finance, fintech and the creative industries – while also planning to accommodate flexible working, adopt ‘smart city’ technology and embrace renewable energy networks. Importantly, this post-pandemic recovery plan forms a part of a broader consultation between the City, businesses and residents. In its recent series on the future of the City, the FT has also suggested that this might include simplifying regulation as a means of retaining the £8.5tr fund management industry.

Wall Street unhappy with Twitter’s decision to ban President Trump

 ZeroHedge has commented on the potentially emerging risks for social media firms following the suspension of President Trump from many platforms. The article notes that some analysts, including Neil Campling from Mirabaud, fear that banning Trump might expose Twitter to greater regulation under the next administration now that the platform is clearly making editorial decisions about what type of political content is, and isn’t, appropriate. Traders signalled these concerns when Twitter shares fell 7% in premarket trading. Changes to the regulation could make social media sites more liable for the content posted on their platforms. This – in turn –  could require tech firms to expense large sums on effective content oversight. Moreover, Bank of America has highlighted an additional risk for Twitter, arguing there may be a fall in short-term engagement. They suggest that the loss of President Trump from the platform might prompt other conservative users to leave the site too.

Priorities for Biden’s Wall Street cop 

The New York Times speculated on the five potential focuses of President-elect Biden’s likely S.E.C. pick, Gary Gensler; three of these focuses are of direct relevance to the IR world. Noting his previous work as head of the Commodity Futures Trading Commission, the NYT suggests that Mr. Gensler might do any of the following: require companies to disclose political donations publicly and in a standardized way; rethink the rules around stock buybacks, including potentially by imposing preconditions on the act; order corporate disclosures around boardroom diversity; mandate company disclosures for climate change risks; and, formulate clearer rules on cryptocurrencies and blockchain technology.

And finally … Shorts in the office: can it be done? 

Just last week, a judge ruled that Boots, Britain’s largest pharmacy chain, had discriminated against an employee at its Preston warehouse in northern England by reprimanding him for wearing a pair of black cotton three-quarter-length trousers to work on a hot summer day in 2018. The Financial Times observes how the wider ramifications of last week’s ruling could shift the dial on wearing shorts to the office. “If you’re not in a client-facing role, you can wear whatever you want in the office,” a portfolio manager at a London-based investment fund writes over WhatsApp. “The question is — can you take the heat from your colleagues?”

Conferences

19 January: Seniors Housing & Healthcare Real Estate Conference, Stifel (Virtual)

19 – 20 January: Winter Restaurant, Foodservice, Gaming, Lodging & Leisure Summit, Jefferies LLC (Virtual)

Contact Us

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