Investor Relations - A Practical Guide - Investis

Liquidity
One of the outcomes quoted companies aim for
from their investor relations activities is to attract
liquidity – frequency of trading in their shares.
Profiling and explaining the company to the
investment community on a continual basis can
assist in creating greater awareness of a company.
Depending on the availability of shares, this can
then assist a company in attracting pools of buyers
and sellers and the potential for higher frequency
in the trading of its shares.
Fair valuation
Similarly, one of the other main goals of investor
relations is for a company to achieve a fair market
valuation, ultimately reflected in the share price, by
managing expectations in relation to the company’s
current and future performance. Communicating to
and with the investment community will enable a
company to detail its own record of its performance
and its strategy using publicly disclosed information.
It will also help a company to understand how it is
being evaluated and whether or not the market’s
expectations towards, and understanding of the
company are in line with its own.
Getting the balance right
Practising investor relations will not automatically
guarantee a company heightened profile, easy
access to capital, liquidity in its shares or a fair
share price. Naturally, other factors outside and in
addition to a company’s own activities, such as the
economic situation, a company’s fundamentals,
confidence in its management team, the availability
of shares and competition for investors’ money, can
have an impact on how a company is perceived,
funded, traded and valued by the market.
Rather, the aim of embarking on an ongoing
investor relations programme is that it enables the
investment community to have greater awareness
of the company’s investment case and commercial
activities so that shareholders, potential investors
and traders, can each take an informed view and a
decision as to their involvement with that particular
company.
For many quoted companies, the balance will be
about updating those who already follow or invest
in the company and profiling the company to new
audiences.
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What Investor Relations is and who it is aimed at