Campus

IR 2.0

Social networks like Twitter, Facebook or YouTube are now part of everyday life. What is being called Web 2.0 thus also offers new opportunities for investor-relations work, and accordingly the University of St. Gallen, commissioned by the Deutscher Investor Relations Verband (DIRK), has studied the use of these media in everyday IR. The outcome of the IR 2.0 study is not surprising: of the biggest firms, the top 100 in the Fortune Global 500, 79% are already employing Web 2.0 applications for their IR work. However, there are only a few firms which, like Google or Yahoo, use social media as their only publication channel and do without traditional media. With users too, the trend is clear: 85% of financial service professionals under 50 rely on use of social networks; 58% of institutional investors and sell-side analysts in the US and Europe stated that from their viewpoint these media will become increasingly important for their investment decisions.

The foreword as signboard

The foreword, the welcome and the letter to shareholders are as it were the signboard of a business report, encouraging readers to read further. In its August survey, geschäftsberichte-portal found that 71% of respondents rated the foreword as very important. Almost two thirds stated that the CEO rather than the whole board should write the foreword. And all were agreed that the letter should be personalized with a hand-written signature, and in any case accompanied by an individual photo. The text should address the reader directly and use the words I and we. Some 70% favoured a personal mode of address like “we are reporting to you”. However, only half think formulations like “it is my opinion” should be used. 80% stated that key figures from the result do not belong in the foreword, but 90% want, instead of those, indications of important events. Respondents were agreed that the foreword should sketch out the key notes of strategy and set forth the business prospects. 40% of the IR managers surveyed were satisfied with the content and language of the present foreword of their current business report, and another 20% were very satisfied.

Shares still out of favour

German investors continue to be skeptical about investing in shares. 34% of the 1,020 securities owners surveyed by dwp bank are planning to include fewer shares in their portfolios in future - only 14% want to raise their exposure to shares. Last year 56% of respondents still wanted to reduce their holdings.

Buy recommendations down

For the first time since 1997, fewer than 29% of shares rated by brokers worldwide were regarded as a buying opportunity. A further 54% were rated “neutral”. This is confirmed by almost 160,000 ratings by analysts in the Bloomberg figures. Research further shows that analysts are convinced that in the next quarter firms’ profits will rise by an average of around 36%, the biggest raise since 1988. Critics suspect that this is based only on a short-term boom in consumer expenditure.