African Investor Relations

What makes investor relations management so difficult is that it spans many corporate disciplines and affects many aspects of business and governance. We have gone one step further and taken this challenging task online. Successfully.

We specialise in building online communities

African Information Solutions for Companies Online Limited (“African Is Cool”) specialises in online stakeholder communications and investor relations. Based on best IR practices, we use the internet to create and grow an online investment community with which you can communicate, and from which you can receive feedback. The bigger the online community, the lower the costs of communication, the greater your influence and the more efficient your communication is.

We use robust specialised software: Investorpass™

The key part of our service is the maintenance of a fully comprehensive interactive investor relations website that includes investor relations specific online software (Investorpass™). Investorpass™ is hosted in Texas in the USA. InvestorPass is US Sarbanes Oxley Act compliant online communications software, which means that the directors are able to certify that the platform is secure – over 300 companies use this software in the USA and on a number of other continents.

InvestorPass uses comprehensive data and interactive features to automatically build an online investor contact database. It is low maintenance since the security and upgrades to the software are all handled online. There are therefore no domestic IT implications to this service, and we do not even need to touch your existing corporate website – we just provide the link to append to your website. In fact our software is so flexible it can manage your whole corporate website should you want a “one-stop” corporate and online investor relations managed solution.

Managed online our service is relevant to companies of all sizes

Our service is managed online so other than an initial visit to your senior executives, generally all of our services are managed over the web. Country visits do depend, however, on the extent of the services required of us: Some clients expand our online mandate to include face-to-face consulting.

We introduce best IR practices to our clients, made relevant for Africa

We also provide advice on investor relations best practices and related communications policies specifically for sub Saharan Africa’s environment; i.e. we focus on the basics and do not get bogged down with onerous regulatory and legislative implications of US securities law.

There are many ways to measure our IR performance (and yours)

We report back monthly to our clients on progress. The key transparent measurement of our and our client performance is the number of visitors registering in Investorpass and opting in to receive information.

We appraise IR practices and research them in Africa

Our blog and news section includes original information and coverage of developments in sub-Saharan capital markets that are relevant to investors and listed companies. Our alerts and feedback interactivity ensures we are responsive to the community’s needs and represent them in the best interests of investor relations.

Our client base is growing rapidly. So is our investor community

We currently have 15 clients in four countries, with several more in the contract implementation stages. Our clients’ market capitalisation exceeds US$1.2 billion and we serve over 75,000 shareholders in our rapidly growing online investor community. In Zimbabwe, we manage the investor relations websites of Kingdom Meikles, Econet and OK Zimbabwe and are currently signing on two other Zimbabwean listed companies. In Botswana, we manage Imara’s online investor relations, and in Zambia Copperbelt Energy’s website and IR function. In addition, we have three clients in Malawi. Our offices are in Zimbabwe, Johannesburg and the UK.

The crux of the matter is not good governance…

If there is one reason you should consider breaking your many barriers (such as technology, lack of time and of resources) to an interactive website, it’s the commercial return enjoyed from communicating effectively with your investment community.

Ask our clients.

Our experience from our clients in the past five years shows really meaningful feedback from all stakeholders in all areas of our clients’ business: new deals, reducing input costs, employment opportunities etc. And we make sure that each feed back submission is responded to. Quickly. If our clients do not respond quickly we remind them repeatedly to do so, in the nicest possible way. This creates so much goodwill.

Our services appeal to a broad range of companies

Brand oriented companies such as telecoms companies and banks find our solution ideal for brand growth and enhancement. These advantages are also very marked in organisations that have a significant number of stakeholders, i.e. a large number of clients, policyholders, outgrowers, depositors, employees, stakeholders and product ranges etc.

Our solution is also a retail shareholder strategy at no extra cost

By providing a proprietary online email service to each and every investor the levels of appreciation shown by ordinary investors is high since most, if not all, companies in Africa ignore their retail shareholders. This appreciation evolves into improved corporate reputation and more business.

It’s also about actively pursuing investors but keeping costs low

We actively attract investors and other stakeholders to our clients’ websites: One of our initiatives is www.africanfinancials.com, Africa’s largest portal of online annual reports, freely accessible to investors. This website directs significant visitor numbers to our clients’ IR websites through the prominent position of our clients’ annual reports, and the traffic is then converted to stakeholder contacts. There are many other communications practices that we recommend to ensure your online community grows. A recent blog on Africanfinancials.com sheds more light.

So what sets us apart from our competitors?

• We identify visitors to your website individually.
• We offer each investor an online webmail function to enable to them to archive and manage your communications, and participate in the communications process. They can even include their own contact details.
• An online investor contact database categorises the investors and other stakeholders that are interested in your website. Investor lists can be exported at any time, which complements other traditional means of investor interaction, e.g. through advisors.
• All that is required in order to create a two-way communication channel with investors is a single visit to your website. There, email options are available to enable your company to “push” the information desired to the email addresses supplied. If your organisation has information of use to the investment community, then you are ideally placed to implement an online stakeholder relations management programme.
• All the activity of each investor on your website is tracked, so there is a full audit trail.
• We solicit and manage feedback from your stakeholders and investment community at every opportunity, i.e. in every email and other exchanges, and it is in this feedback where the strategic value lies.

Our clients are our greatest supporters

Have a look at the African Sun testimonial for an example of what our clients think. All our clients have recommended our services and if you want to know more, and perhaps speak to them directly, you will find them in the document named “What Our Clients Say” on our website.

Being unique means we don’t stand on anyone’s toes

We offer a truly unique comprehensive online investor solution across Africa. Our solution does not in any way conflict with your current IT, PR or marketing initiatives – in contrast, it complements them.

The crux of the matter is…

The core objective of having an investor relations approach such as this is to ensure that investors have access to information that enables them to make educated investment decisions about the value of your business. This protects directors from the wrath of shareholders when shares are undervalued and overvalued.

This is prima facie about hassle free responsible communications that ensure that directors carry out their core governance obligations. In reality the efficient mechanisms we implement to solicit feedback are of strategic commercial value. It is this latter point that set us apart from any other communications or website firm.

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Read ASEA’s annual report for 2008 and a total of USD10,000 was received from its 20 member exchanges – a total of USD500 each. What is this if not an indication of the confidence that Africa’s stock exchanges have in the association and the resources available to it? Yes, the member exchanges have utlilised their own resources to assist in managing ASEA, but I think that ASEA is just a white elephant. Here is why:

A review of the stated objectives of ASEA versus outcomes shows that very little has been achieved since its inception 12 years ago. And this perpetual non-achievement is due to continue. In 2008, ASEA participated in an African Union workshop for the establishment of a pan-African stock exchange “where a gradual approach to its implementation was recommended”. Why can none of the decision makers involved in these events see the fragmented manner in which regional markets are developing and tell it like it is: There is no hope for a pan African stock exchange anytime soon? Anyone who suggests otherwise is purely there to ride the wave of free financial grants to enhance their airmiles status. ASEA’s annual conference, the highlight of every year, never results in any subsequent action or achievement. ASEA is discussing exactly the same issues that they were discussing in 1997.

Or perhaps ASEA has achieved a lot and has just not been able to communicate it to the market through its website or any other means? This is what the Chairman Maged Shawky says about the ASEA website:

“…we attach a great value to ASEA website, launched under the URL www.africansea.org, as well as the ASEA Yearbook, first released in 2006, as a summary reference for ASEA members, to serve as marketing tools to attract interest to the African region.”

The 2008 annual report goes further to state:

“To enhance the ability of ASEA in providing a credible and central source of information on the Association and its members, ASEA website was upgraded several times to have a more user-friendly interface, updated information and useful features that best serve all users. The website provides a medium that highlights ASEA programs and latest achievements, together with members’ profile, news, trading data as well as direct links to their websites.”

The website is out of date, incomplete (contrasting sharply with the “comprehensive” information ASEA undertook to present) and no responses were provided to any of the email communications to the stated representative contacts. I will not go into any detail but there is plenty of it.

The primary objects of ASEA also include the sharing of information and marketing and establishing markets, but 25% of the 20 stated member exchanges profiles do not exist in the 2008 annual report: namely, BRVM, Casablanca, the Libyan Stock Exchange, the Swaziland Stock Exchange and the Zimbabwe Stock Exchange.

Apparently an ASEA 2008–2010 corporate plan was prepared but this consists of little other than the establishment of three “task forces” on corporate governance, integration in Africa and promotion and marketing. Without a practical focus, financial resources and insight into what is actually needed in African markets to promote investment, ASEA has no hope of achieving anything significant other than the right of passage of its members to the annual conference.

Africa Investor has partnered with ASEA in its annual awards in the mistaken belief that it adds credibility to their excellent initiatives. In fact, in essence, the complete absence of substance to ASEA is not the issue. ASEA provides its office bearers with a pan-African appearance whilst at the same time avoiding the country-on-country politics that typifies how Africa’s regulators have carved up their respective markets.

If ASEA only had one core task, that of ensuring and promoting standards of information availability, that would suffice. But they want to change Africa in all respects. Wrong approach. Our free portal of annual reports www.africanfinancials.com is achieving more investment promotion in two days than ASEA has achieved on over a year: We have over 100 visitors a day ASEA has had 169 visitors to its site in a whole year according to its ticker.

Stock exchanges with any semblance of common sense should withdraw their support from ASEA (what support you may ask?) until a practical and common sense strategy is adopted that actually promotes investment.

So what is a “practical and common sense strategy”:

• Sort out the membership fee structure (this has been on the table for some time now) and how it is invested: Just a little from each exchange would go a long way if an internet platform were core to strategy, i.e. forget secretariats, vast travel budgets and the like, spend on practical things like a decent website and ensure it is up to date.
• Focus, and focus on something both sensible and achievable: information availability. This is practical. It adds value. All the rest such as corporate governance, integration etc. have been or are currently being flogged to death by overpaid traveling consultants that understand very little about what is actually needed to do something instead of talk about it. After five years or so, another theme could be adopted. Being all things to all men is rubbish. The internet is changing the world and Africa’s regulators are fast asleep.
• Outsource managing the strategy set out by the ASEA board to a qualified company.

It’s that simple.

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TIP 1:

Make it mandatory that annual reports be published online as soon as they are made available or posted to shareholders. Less than 30% of African annual reports are currently online!

TIP 2:

Require an IR contact to be clearly indicated on the company website or stock exchange website and require a maximum turn around time. Investors should have access to companies that they own. They usually don’t!

TIP 3:

Automate the publication of corporate actions online with free access to attachments. The JSE has been offering the SENS platform to African stock exchanges for years – why not use it? Investors need information to make educated investment decisions.

TIP 4:

Incorporate the core investor relations best practices into the listing rules. And name the companies that are not compliant. Why? It makes sense, and it creates value.

TIP 5:

De-list companies that should not be listed, i.e. those with very low free floats and low number of shareholders. They are not serving any purpose except adding to the apathy of other listed companies.

TIP 6:

Do not seek rents from investment data of listed companies. Africa can’t afford it. Monetising these data should happen later, after the value has been created.

TIP 7:

Host a mandatory annual investor presentation event and ensure that all companies participate. Make sure to follow up and disseminate the presentations online. Why? To increase awareness in directors that they have a duty to ensure information is available.

TIP 8:

Standardise minimum requirements for the investor relations sections of websites, and name those not complying. Why? To create awareness.

TIP 9:

Pay for an IR specialist to present to listed companies at least every 6 months to increase awareness.

TIP 10:

Have an active public investor education programme, co-funded by government. Typically governments have created the masses of shareholders by privatising former state-owned companies through the stock exchange. Therefore it should be a joint responsibility into ensuring these investors become meaningful participants.

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