What do directors of Zimbabwe Stock Exchange listed companies need to know about their online investor relations activities in light of the launch of C-Trade, Zimbabwe’s first mobile share trading app?
C-Trade is expected to widen the investor bases of listed companies to a broader base of retail investors. These companies are already prepared for the increased demand, but what about the remaining + 55 ZSE listed companies that are not? Do directors of listed companies care?
Why care about C-Trade?
Why should resources be applied to online investor relations at all? Here are questions for ZSE listed companies with some possible answers and what and why listed companies should embrace broader investor practices:-
Q1 Do you treat investors as potential customers?
Investors can lose money if they do not trade with full up to date information. Where are C-Trade users going to find this information? If a C-Trade user can find timely, complete and accurate information on a listed company on the Zimbabwe Stock Exchange, they are likely to visit that company’s website and treat the company with higher regard, than companies that do not provide information. This is an opportunity for the company to showcase their commercial brand to a pre-qualified stakeholder base. Catch them and turn them into customers.
Q2 Do you effectively communicate the strategic reasons why investors should consider investing in your company?
C-Trade is being targeted at the uneducated, retail investor. Investors need to know that they need to educate themselves about investing. The least companies can do is provide 3 reasons why investors should consider investing in your company. It’s convenient for investors to know this as soon as they discover a listed company. Giving this basic information may take investors to the next level of viewing a corporate website and signing up for email alerts. This big picture stuff captures attention immediately.
Q3 Does your management and or Board have an investor relations disclosure and communications policy?
With people being so empowered on social media, and trading on C-Trade being made so easy, it’s possible that PR and investor relations crises could occur unnecessarily. Companies need to know what to do within an overall board policy if this happens. A policy also sets out ways to address other governance risk issues. What if false negative information goes viral? What if material investor information is released to the market early? Sh*t happens and boards of listed companies should know what to do and when and why when it does.
Q4 Do you have a key reason why you are or wish to, apply resources and time in online investor relations and help C-Trade users? Here are 3
- It’s good corporate governance
- Treating investors as customers is commercial opportunity
- Overall reputation improves at every interaction
Q5 Do you consistently publish investor relations news and share data into your own social media channels so this information can be found by C-Trade users?
Where are investors looking for and finding investor information? We do not know, except that it may be all over the place. A good approach for a listed company is to disseminate its information widely across many channels and do this at low cost, and in a manner that sends investors back to their corporate website, to sign up for their email alert or social media channel. That connection can then be leveraged commercially over time.
Q6 Do you use professionally managed investor conference calls to record (in audio and text, with Q & A with top investors) all of the key issues related to investor relations and the questions and answers of investors?
A ONE STOP audio file, transcript and presentation of investor information for investors is the best way of dealing with investor relations. C-Trade users would be able to access this information from corporate websites and hear everything they need to at once. They would then check the corporate website for the latest news and view the share chart for the latest price movements. Here’s what Warren Buffett says about investor relations – his approach is the de facto best way of dealing with investor relations but few if any listed companies in Zimbabwe use this approach.
Q7 If you do have investor conference calls do you publish the presentation, audio and text on your website and disseminate it on social media?
Listed companies in Zimbabwe having private investor conference calls, organised by brokers should stop this. There’s too much scope for insider information to be passed on to select people and this is not fair on the investor in the street which include the C-Trade users. Retail investors must be treated with respect because they have the same rights as multi-million dollar investors.
Q8 Do have a “detailed” or “summary” investor relations calendar published on your website and into social media?
Consider this scenario: A C-Trade investor buys shares the day before the earnings of a company collapse by 70%. This sort of thing happens, and for uneducated investors the risk is greater. It’s important to tell investors (prominently) when key earnings information will be released to stop this sort of thing happening.
Q9 Do you publish your core management team and corporate governance philosophies and practices online?
Many investors (including C-Trade investors) do not invest in companies, they invest in people: CEOs and management teams. Investor look at past successes of executives and use that as a gauge for whether a company is going to be successful. It’s obviously one piece of information in the mosaic of information to digest, but its important: so companies should publish this info online.
Q10 Do you send investors email alerts as soon as information is available and published?
On average across the globe, 1 in 5 emails are opened. That’s a 20% success rate each time. Send a million emails and 200,000 will be seen. Offer email alerts to C-Trade users so that they become part of your community and they remain connected. This provides commercial opportunity.
Q11 Do you use SMS alerts to contact investors or potential investors?
Using as many channels to communicate with investors is a requirement of modern day communications and modern day corporate governance. We do not know where C-Trade users are accessing investor information online and any opportunity to send them information directly should be embraced by every listed company. Paying for this is can be justified from the commercial perspective but it does require a listed company to ensure that their investor information is disseminated broadly and efficiently (and at low cost).
Q12 Does your company have a comprehensive file downloads section where archived documents are categorised by year and type?
Making all your PDFs readily accessible is a basic communications governance activity but few companies do it. As soon as any PDF of earnings announcements or press releases are published, they should be sent out on email and social media to investors and thereafter easily discoverable online.
Q13 Do you provide a 5-year financial summary information (income statement, balance sheet and cash flow statements) for ease of consideration by investors?
A simple summary of the income statement, balance sheet and cash flows can assist C-Trade investors in appraising the financial performance of your company.
Q14 Do you have initiatives to increase your investor visibility through social media channels other than those owned by you?
It’s all very well using your website to make investor information available but companies can consider using a third party investor data platform like Africanfinancials.com? This investor platform is specifically designed to send investors to the company and grow investor contacts database.
Q15 Do you publish comprehensive share price data on the investor relations website e.g. year to date, year on year, highest share price lowest share price etc?
If C-Trade users are trading based on live share data, they will also want to see the 5 year, 1 year 3 month and immediate past history on their mobile phones. They may want to download share price data and charts for further inspection. These 15 listed companies on the Zimbabwe Stock Exchange have this information readily available and here’s an example
Listed companies should at least have comprehensive share charts on their company websites for C-Trade data. Comparability with market indices is important for C-Trade users in their investment decision. The OK Zimbabwe share chart above is downloadable as data and an image.
Q16 Do you publish fundamental share valuation parameters on your website such as PE ratios, price-to-book value ratios etc.?
Publishing basic valuation data on your corporate investor relations website goes a long way to providing C-Trade investors with the information they need to trade. Using a platform like Africanfinancials.com to compare valuations between listed companies, complements the overall investor relations function.
Q17 Should companies measure the performance of C-Trade and online investor relations?
It will be worthwhile for listed companies to follow how the C-Trade platform is being used by investors and how its use is affecting listed companies and the market in general. A good source of information here is the Africanfinancials Twitter page. If it is greatly successful then additional resources could be applied in areas to leverage this.
Q18 Do you get reports on what social media is saying on your brand and company and investor relations online?
Using social media intelligence software to track your company’s brand mentions and C-Trade is an excellent way of keeping track of your online reputation (as well as your competitors’).
The evolution of C-Trade has started and listed companies, at this early stage, should monitor how this initiative develops and ensure that they are ready to interact and provide the information needed by investors across a number of social and digital channels.