Singaporean institutional investors are willing to pay a quantifiable premium for companies with good investor relations practices, according to a new joint study from the Singapore Management University and the Investor Relations Professionals Association (Singapore) (IRPAS)
The study, published in June 2009, found that 89% of Singaporean institutional investors would pay a quantifiable premium for SGX-listed companies that practiced good IR. A third of those asked quizzed would pay a 10% premium, while almost a quarter would pay a premium higher than 15%.
It was also discovered that most institutional investors rated the current level of Singaporean IR as below those of comparable markets, suggesting that increased efforts in this area would be highly effective in improving the value of SGX companies. It concludes that companies ‘could invest much more in IR than they currently do’, and that closing the gap between IR standards and the expectations of investors could pay handsomely.
The implications of this study is that institutional investors clearly realize the value of good IR and the efforts of the people behind it; the credibility of management and IROs were rated as the most important qualities in a company’s IR.
The complete Institutional Investors’ Assessment of Investor Relations in SGX-Listed Companies’ is available for download in PDF format from IRPAS’ website.
