A Shift in the Research Landscape
The landscape of broker and analyst research and coverage has evolved significantly with the advent of the digital era. There’s an abundance of free data online about listed companies, yet this information is often fragmented, sometimes incomplete, inconsistently presented, or even hidden behind registration or paywalls. This, coupled with under-resourced brokers in many markets, creates a challenge for anyone seeking to form a holistic understanding of a company’s financial health and prospects.
Embracing the Role of Listed Companies
Listed companies stand at the source of their investment story, equipped with the ability to tell it accurately, completely, and with authority. Standard 16 of the Minimum Standards of Online Investor Relations urges companies to consider how they can aid the communities that issue research about them.
Practical Strategies: Supporting Analysts and Brokers
There are a number of ways that companies can support brokers and analysts. This could involve providing a more in-depth set of raw financial data that can be used in financial models, or assisting with tools that facilitate historical financial analyses. Companies could also share insights and assumptions that underpin their long-term business models, effectively supplying the nuts and bolts that analysts and brokers require to do their work.
All of these strategies should be enacted under a defined disclosure policy to ensure that the company maintains its regulatory compliance while fostering transparency.
The End Goal: Balanced and Fair Coverage
The ultimate aim of Standard 16 is to ensure that third parties, who trade and interact with your investment data, are telling your investment story fairly. This story should be supported by robust financial data and insights. They need this support to deliver accurate analyses and projections, and companies can play a proactive role in facilitating this process.
Conclusion: Maintaining a Balancing Voice through Connection
Staying connected with brokers, analysts, and other stakeholders not only helps maintain a balanced narrative around your company but also enhances the visibility and understanding of your investment story. Companies should embrace their potential role in shaping this narrative by actively facilitating better research coverage.
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AfricanFinancials works with Boards, CEOs and companies who want to build sustainable businesses through better corporate and investor communications. Our focus is online investor relations to promote secure two-way communications with investors and stakeholders.
