African Investor Relations

It’s not often that one gets to launch an online investor relations initiative and new website for a company that’s over 100 years old. Well that’s what we have done for CFI Holdings. That’s cool!

CFI is a Zimbabwean vertically integrated conglomerate predominantly involved in poultry, agro-industrial processing, irrigation, retailing, and property management and development.

CFI Holdings’ investor relations section and IR initiatives is not a world trendsetter – it does not have to be – the company offer the basics to their shareholders (and customers) as required by good corporate governance practices. Merging investor relations initiatives with being more competitive in the commercial space online just builds overall corporate reputation. It’s a fact that is lost on many corporate executives: except those at CFI of course – and a handful of others.

CFI is an interesting investment opportunity given its asset base and vertically integrated structure and the group has struggled post “dollarisation” in Zimbabwe as have all companies. For international investors looking at Zimbabwean listed companies it’s tempting to dismiss the efforts of small listed companies (as measured by market capitalisation). But when measured by the efforts these companies are making to engage shareholders directly and to showcase brand online they ARE leaders in Africa – just look at how other corporate websites fair in African markets – particularly listed companies. Now appreciate a company like CFI.

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The egos of founding shareholders grow with the profits of their private company. This results in the very significant decision to list the company on the stock exchange at some stage – typically as part of a mid-life crisis.

This listing process “enhances brand”, gives “a higher profile”, provides a “better rating” with the banks. The key thing for the founding shareholders is that they don’t have to give away control. They raise money from retail shareholders who participate to make a “quick buck”, irrespective of the IPO price. The expectation of a “quick buck” breeds the expectation of a “quick buck” and so stagging inevitably occurs to the ultimate detriment of the retail shareholder. Count how many IPO share prices in African markets are actually higher now, after the event.

After the IPO the egotistical founding shareholder then slips back into his old ways.  Illiquidity in the share slowly results in its share price being undervalued compared to the company’s asset value and peers. Dealing with retail shareholders and their rights, is a hassle at the best of times but more so when there are few shareholders accounting for a relatively small percentage of the issued share capital. This in turn results in low trading values, both as a percentage of issued shares and in nominal terms. Its easy to lose interest, for all of us.

Generally speaking there are no efforts by egotistical shareholders to engage their company’s shareholder base as potential customers of the business post IPO. Except, of course, when the annual report is delivered – or “if” the annual report is delivered to the minority shareholder. Some markets such as Kenya have dropped the requirement to deliver annual reports to shareholders.

Over time, as the share price declines as a result of illiquidity, and in order “grow shareholder” value, the company then embarks on a share buy back scheme whereby the company buys-out the same shareholders it sold shares to. Take this to the logical conclusion a listed company then systematically reverses the IPO process to the point where the company has to, or it “makes sense” to de-list.

The moral of the story is that directives of listed companies and potential listed companies and indeed regulators, do not provide enough strategic thought about why their companies should list and what the benefits are. “Building brand”, “better reputation” and all those cliches stand for nought unless the listing is used actively post IPO and this is where African listed company directors have their head in the sand (this is the polite version).

African capital market players need to look at what small listed companies or indeed companies that have small free floats are actually achieving by listing. A review of most African stock exchange listed companies’ websites show that the answer is “not a lot”.

Its so exciting looking at African markets’ potential until you actually see how many companies are actually “investable” – very few. This illiquidity paradox is serious.

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Many well run African banks are profitable and enjoy a very strong investment story given their critical role in their respective economies. Banks are a favourite amongst investors of all types: they are easy to understand (theoretically) brand awareness is high and they are profitable. They are also highly regulated which adds confidence to the general investing populous.

Conversely commercial banks are in a particularly strong position to benefit from an online investor and stakeholder relations function for a number of reasons:-

• Brand outreach is key because of the competitive nature of the banking industry
• Customer / stakeholder communities are large and widely spread around the World
• Communications corporate governance and reporting complements prudential governance compliance
• Market confidence is critical – a good website adds to corporate reputation. For banks “Online Corporate Reputation” or OCR is a growth area enabling differentiation from peers
• The diverse nature of banking operations provides opportunity to cross sell products and services

A bank is a provider of diverse set of products and services to many, many thousands of customers and stakeholders. How can a website landing page or indeed a website in its entirety capture everything that a bank can do?

The fact is it can’t.

So management of African banks have to prioritise.

The most obvious place for them to start is the 5 year strategic plan presented to the Board. The look to the financial statements: where are the majority of revenues generated? Which aspect of the business has the most potential and which deserves to be given the most exposure or the highest quality of exposure? It is this process of prioritisation and familiarisation that takes time. It’s worth it because the creation at the end of the day that crystallises this, is a website that is going to work for the bank’s brand for 5 years or more. Return on investment will be high. Peer competitive rankings will be high. Customer ratings will be high.

Take time to view a few African bank websites and the majority of them do not know about the advice I have above. The evidence: the poor quality of their websites. This is lost opportunity.

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We like to celebrate excellence, even though its not our own. Why? Because we understand the value of a decent website and we appreciate good work.

African website vendors are probably unable to replicate the quality of the Q4 products (perhaps they (we) can!) but for most African listed companies the 80: 20 rule applies. 80% of the benefits of going online are enjoyed from 20% of the effort. Examples? Timely info. Comprehensive info, push technology, alerts – get the basics sorted and then sit back and watch the benefits. Q4 is at the forefront of world class communications solutions and their best practice is there for us to learn from and to aspire to.

So the message to listed companies and regulators of African capital markets is: LOOK and see and digest what is happening elsewhere in the World! Lets take those best practices, apply them in our markets and actually put into place tools for enabling efficient and informed investor relationships and decisions instead of harping on with rhetorical cliches about Africa being the “last frontier” and full of potential. We’ve heard this for the past 25 years and to be honest its boring.

Lets hear about the African awards for best online websites! Not awards that are self serving but awards that are independently determined. Perhaps the African Stock Exchanges Association can pick this up……..

I suspect not.

This article below was released by Q4, a leading provider of online investor relations solutions including newsrooms, corporate and investor websites and strategic consulting. I have no financial interest in Q4, but what they highlight in their Q4blog triggers an awareness to investors and listed companies across the globe of the power of the Internet.

We’re pleased to announce that our long-term client, Agnico-Eagle Mines, has been awarded first prize in the electronic disclosure category of the 2011 Canadian Institute of Chartered Accountants (CICA) Corporate Reporting Awards (CRA) for their investor website: agnico-eagle.com.

This is the second year in a row, that Agnico-Eagle has been recognized at the CRA for their best practice IR website, securing an Honorable Mention in the electronic disclosure category in 2010 – with first place awarded to Potash Corp., a winner in the electronic disclosure category multiple times.

Companies eligible for the electronic disclosure award were judged on specific content relevant to investors, navigation and usability, innovation, overall effectiveness and IR website best practices. This year, companies were also evaluated on how well they integrated social media into their sites.

Agnico’s long-standing commitment to continually improve the investor experience on their IR website is focused on achieving a global standard in best practices. An additional goal is to limit the effort required to update site content.

The strategy for the site evolved from a comprehensive IR website best practice audit of the Agnico site conducted by Q4 and provided to both the client and their design firm, The Works. This document detailed key recommendations, which were adapted in the redesign. A strong collaboration between Q4, The Works and Agnico-Eagle throughout the design and development of the site helped ensure that all key communications objectives were met.

What follows are some of the features that make Agnico’s site exemplar of best practices:

The Design

The talented team at The Works created a clean, progressive design that provides numerous ways for investors to easily navigate the site to not only find the information they are looking for, but to also ensure that they encounter the information Agnico wants them to see. For example, right from the home page the rotating images in the masthead highlight key content and events, and the drop-down main navigation prominently singles out one specific piece of content in addition to providing links to all sub-section information. The navigation also makes it easy for users to see where they are, where they want to go and how to make their way back. The site also brings key content forward by prominently displaying frequently sought information such as news releases and presentations, as well as providing lots of quick links:

Integrated Social Media Galleries

Agnico was interested in making their information more interactive and easily accessible – not just on their site, but in alternate channels as well. The multimedia galleries offer an extensive collection of Vimeo videos and Flickr photos, which Q4’s platform automatically pulls in from the social channels and integrates into their site. Some of these assets are also displayed elsewhere on the site in context with specific information:

Follow Us Page

The ‘Follow Us’ page on the site provides a number of ways to stay connected to the company such as email alerts, RSS feeds, Facebook, Twitter and Vimeo. In today’s multi-channel world, public companies must ’be where their investors are’ to stay connected. Prominently featuring ‘Follow Us’ as a universal link in the site header makes it easy for investors to find this information:

Quarterly Report Summary Page

Agnico’s quarterly summary page provides an aggregate view of all quarterly related materials in a single page. It includes the press release, conference call, webcast, report and financials. Agnico also provides a brief video of their CEO, Sean Boyd who provides commentary on the quarter. (Much of the information in this video is scripted in advance of the earnings call and Agnico’s video production company Silverpoint is able to shoot and produce the video to ensure that this information is on the site on the day of their earnings call.) The right rail in this section is entirely driven by tags. So each time the company reports their quarterly results, the tag on this page (for example Q22011) is updated to the next quarter i.e. Q32011. To address Agnico’s goal of minimizing manual updates, Agnico touches the content once and the information automatically aggregates on the quarterly page (and other pages, such as the Investor Briefcase, Presentations etc.).

Interactive Financial Data

The interactive financial data also called the ‘operational database’ on the Agnico site, is an innovative investor service that gives analysts a full set of interactive quarterly financials and fundamentals. Provided by our partner, Virtua Research the financial database permits customized charts, excel downloads and the ability to share content from the model through email and social networks:

This award underscores the commitment and effort Agnico puts into continually making their IR website an integral part of communicating their story to investors. Congratulations from the team at Q4 to everyone involved!

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I follow Q4 closely because they are world leaders in what they do. I have no financial interest in Q4. Unfortunately. But what they say rings so true with my mission in life. There are good reasons for this.

With regulators, directors and investors in Africa lagging their first world peers, but with listed companies seeking capital and investment in the “last frontier”, the prospect of enabling African listed companies to empower themselves (rather than relying on brokers and regulators) in reaching out to investors is very compelling. For me at least – because the absence of progressive capital markets regulators (in the adoption of the internet as a communications and investment promotion tool) means that listed companies should be given the reins to determine their own future. The reasons are : there’s an absence of information, its good corporate governance, it builds brand and corporate reputation and the upside is great.

Anyway I take the liberty of replicating Q4′s blog below because I want to send their message to listed companies in Africa. Bizarrely, what Q4 is saying in first world markets has even more relevance in African markets. For me at least.

A few notes about IR in African markets:-

- newswires are not used (with a few exceptions)

- conference calls are not used (with a few exceptions)

- podcasts are not used (with a few exceptions)

Here goes the message from Q4

“Late last week the SEC issued guidance on how companies can use corporate web sites and blogs for the release of material information under regulation Fair Disclosure. This timely announcement has the potential to dramatically impact the corporate disclosure industry.

Rather than outlining the content of the guidance I thought I would provide some initial thoughts on what I see as being the key messages of the interpretive release. If you are not familar with the guidance please see the following links for more information.

SEC Docs

• The full SEC interpretive release (47 page PDF)
• SEC Press Release

Some Initial Blog Posts

• SEC OKs websites and blogs for Reg. FD
• SEC To Recognize Corporate Blogs as Public Disclosure, What This Means for Wires and Press Releases
• SEC To Recognize Corporate Blogs as Public Disclosure. Can We Now Kill the Press Release?
• The emerging self-distribution news model

Here are a few initial take aways from the announcement:

The playing field of disclosure has been leveled. Newswires no longer have the built in demand for their services that they did before. (NYSE still mandates the use of wires but the assumption is that they will follow suit). This does not mean that the Newswire’s are going out of business, but it certainly means they are going to have to compete with more than just each other moving forward. Newswires will need to look closely at their business model and determine how they are going to compete in a world where the distribution of information is free (welcome to the Internet).

The press release is not dead. There is nothing in any of the SEC announcement that speaks to companies not using a press release. The press release is a document type, not a distribution method. It can be posted to a corporate web site, company blog or sent out over a newswire. IROs and public companies have well defined controls and procedures around the creation of press releases and other disclosure documents. This recent announcement does not impact the importance of using a press release to disclose information to the market, just how the press release gets from the company to the investor.

In order for information to be “Public” (and applicable to RegFD) the corporate web site needs to meet 3 criteria.

1. a company web site is a recognized channel of distribution
2. posting of information on a company web site disseminates the information in a manner making it available to the securities marketplace in general, and
3. there has been a reasonable waiting period for investors and the market to react to the posted information.

As you can see, these are quite general and not prescriptive, this means that companies will need to be committed to meeting these guidelines and likely it also means that new vendors will step up to help. This criteria warrants a post on its own, so I won’t go into detail on each aspect here.

The guidance is principle based and future proof. If the SEC had come out and said “you must use RSS and email alerts” it would be creating the same problem it is now getting out of. By using a principle based approach it allows the market to determine what is acceptable and ensures that certain technologies and/or companies are not able to create protected industries (like the newswires did). Having said that, a principle based approach also creates a grey zone that lawyers do not like, which means that the mass market of issuers will likely not change anything, until the market adopts a new standard. This will require forward-thinking issuers and vendors to innovate and create this new standard.

The corporate web site is the podium for all disclosure. We’ve been saying this for some time (as have many others) but it is now official. The corporate web site is the hub of corporate disclosure. With this new guidance and the combined innovated efforts of issuers and vendors, we will continue to see the corporate site dominate the world of disclosure for the foreseeable future.

I would certainly advise all those in the corporate disclosure space to read the full 47 page report. It’s long but there are some great comments in there.”

NOTE: This blog entry is sourced from the company blog for Q4 Web Systems a leading provider of on-demand software for corporate and investor websites. The text above is a direct extract from Q4 Web Systems Blog, an excellent resource for IR best practices.

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In May 2011 the African Stock Exchanges Association (“ASEA”) announced the launch of its new website and a partnership with i-Net Bridge of South Africa (a data vendor). In fact the website is exactly the same as the old one unless I am missing something.

The revolutionary new features on the website were announced as follows:-

1. An interactive African map, containing information on end-of-day market data of ASEA member indices. This actually appears to be up to date, so not sure what has gone wrong here, although one does have to guess which African countries have stock exchanges in order to get the statistics thereon because the countries are not shaded. I can’t see this tool as being the primary source of up to date African market indices data for investors around the world. I do concede that the Libya map data says “No data available” which suggests that something’s wrong in Libya or they don’t actually have a stock exchange – not sure on this one.
2. A charting feature of the tracked indices covering time horizons of 3 months, 1 year, 3 years and 5 years is also available (i cant find this on the website unless you try to click on the moving ticker which reminds me of some of the computer games my kids play with to develop their hand-eye co-ordination).
3. Ticker tracking the evolution of ASEA members’ currencies against the US dollar.

The communique proudly states that “This new website is the product of a collaborative effort between ASEA, The Egyptian Exchange and I-Net Bridge” as if this signalled the end of a 5 year-long skyscraper construction project. All that has happened is that ASEA has added I-Net Bridge’s newsfeeds from the Mauritian, SA and Egyptian exchanges into the website – news on other exchanges doesn’t exist, so if I-Net Bridge is responsible for “sourcing relevant market data” the’re not doing their job.

There are also index and exchange rate tickers on the website from I-Net Bridge, again news that is so very widely available already. I do concede that you can click on the market indices ticker to get to a chart of the indices of that market: this is what you get:-

This is useful data, very useful…..

So what ASEA has done is taken the most highly available information from the largest most efficient African stock exchanges and placed it on their website on the assumption that this meets their objective of developing African markets on a pan-African scale. In order to achieve this feat they have tied up with I-Net Bridge, a leading South African based data vendor who, as with other parties, have assumed that their corporate profile will be enhanced by associating with ASEA.

Timely information? The latest download on the site is for the 2008 annual yearbook, the last committee meetings news is dated 2009 and there are no “upcoming events” only past events in the “upcoming events” section. Most pages show that a total of 631 visitors have visited the website of these one can safely assume that +60% arrived by accident or are involved in the websites upkeep. The balance of say +/- 300 people would have visited in the past 4 months, unless of course the ticker started when the website was first launched in 2006 ……….

ASEA’s cash resources are sitting on US$113,000 and each year its small surplus (because ASEA doesn’t actually invest in much) is taxed at 30%.  In the meantime they, and I-Net Bridge should not pretend to have created anything other than a meaningless information resource on African markets. I did find the 2009 annual report and that had some useful information in albeit out of date.

Why I am riled? The objectives of ASEA are not being met when they could and should be, because Africa is a talking point at the moment with the rest of the World is in meltdown. And what are the regulators doing to promote Africa? – not what the Charter of ASEA says. Our regulators act in a fiduciary capacity for the whole of Africa. That’s my issue.

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I was doing some research into the banking sector in Malawi and had to download the National Bank of Malawi 2007 annual report. A cool 198mb of it, which took a few hours and I have a relatively fast link. The 2010 annual report is posted online in Quark Express – a format that no ordinary person can view without the software which costs a few thousand US$.

National Bank is Malawi’s largest bank and a very strong brand there. It’s a public company and part of the Press Corporation Group, Malawi’s largest conglomerate, also listed on the Malawi Stock Exchange and the London Stock Exchange.

One would think that a dominant bank, with a dominant brand in a dominant group would be keen to accentuate its dominance but it’s bible: the annual report, is accessible only to the most hardened researcher desperate for data. Just trying to get into their website now I have failed.

Malawi is not in a good state politically or economically at the moment and according to www.Internetworldstats.com there are 716,000 internet users there. So is the internet just not worth taking seriously because Malawi is a poor country and no-one uses the Internet? Or is it a case of the Internet is an ideal place to target people with the disposable income and demographic profile with a view to selling them banking and financial services? It’s the latter.

National Bank probably thinks that they have enough day to day interaction with their clients in any event and they do not have to take the Internet seriously. Well NBM’s share of listed banks (Stanbic, FMB) profits has fallen from 63% of total profits in 2005 to 44% in 2010 so one would think that the group would use all available means to reach out to customers and investors. The integrated online communications models of the current day means that you can’t or shouldn’t view an investor as an investor, or a customer as a customer. They are, I dare to say, “stakeholders”. They are everything all in one and a corporate website should be structured to take this into account.

In any modern day corporate strategy the Internet should be a core pillar of marketing and investor outreach. There is one reason that is 100% defensible in this regard. The cost: benefit ratio makes it worthwhile for any company actually.

So posting Quark Express documents and 198mb annual reports is just not on. It’s the basics that African listed companies need to sort out and this isn’t difficult. The absence of annual reports on www.africanfinancials.com is evidence of Africa’s ignorance in dealing with the basics of investor relations and National Bank is an example of part of what’s wrong. Malawi is a country where the Internet should be taken more seriously because of the commercial benefits.

THERE IS AN OPTIMISE PDF FUNCTION IN ADOBE SOFTWARE TO ENABLE LARGE PDFS TO BE CONVERTED INTO SMALLER, EASIER TO USE FILES

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Olivine Industries Private Limited launched its new website: www.olivine.co.zw today and I was thinking how important it is for investors to know how strong a company’s brands are. In Zimbabwe, Olivine has been through the worst of the hyperinflation and judging from the AICO analyst presentation podcast, is about to emerge strongly as a strong FMCG player in Zimbabwe. Whether or not this happens is an interesting conundrum for investors in the AICO Group, but the message from AICO is bullish. The fact is that AICO is communicating its investment story effectively in clearly in challenging times. Investors receive this information and then decide.

In the meantime there are millions of Olivine customers in Zimbabwe, some with grey hair, that have enjoyed Olivine products over the years ( I personally have a weakness for their chicken soup) and also enjoyed their old television adverts of yesteryear .YouTube videos of these historical 90s advertisements provide Zimbabweans with nostalgic journeys into growing up in Zimbabwe.

Big Law Management Consultants (“Big Law“), whose services in Zimbabwe are supported by African Is Cool was responsible for this website and the commencement of the online communications outreach initiative of Olivine Industries Private Limited, a subsidiary of the AICO Africa Limited Group.

Showcasing brands that Zimbabweans of all ages have come to know and adore, Olivine Industries’ new website provides full information, corporate, aesthetic and technical, on their product range. Management contacts, email alerts of special offers, online order forms and overall corporate information, for example, quality and assurance standards, are provided in a content rich and interactive website. In a country with 1.4m Internet users and an ever- growing Internet penetration rate a commercial website like this can only add value.

Farayi Mtangadura, Olivine’s Sales & Marketing Director provided insights into Olivine’s online communications strategy:-

“As Olivine emerges from strength to strength, we invite our partners in business and stakeholders to visit www.olivine.co.zw, register to receive email alerts on products, email updates on Olivine recipes and to contact us at any time. We value your feedback and invite you to be part of our next 80 years in Zimbabwe.”

View Olivine Industries’ website here.

Register to receive email alerts from Olivine Industries here.

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By L.S.M Kabweza

Some two weeks ago, we got pointed to the news that AICO Africa Limited had announced an online investor relations initiative. AICO is listed on the Zimbabwe Stock Exchange the holding company of Seed Co Limited, Olivine Industries and the Cotton Company of Zimbabwe Limited. Looking at the AICO website right now, you can easily see the value of the online investor relations concept itself as a PR/IR tool; no fancy design, just a lot of useful information neatly packaged.

This new initiative is being carried out by Big Law Management Consultants. The company is doing similar work for other listed companies in Zimbabwe and the region. Some of their clients include Innscor, Econet Wireless, African Sun, Edgars Stores, OK Zimbabwe, FBC and Truworths.

We contacted the Big Law CEO, Rob Strangroom, to get some information about the company and the work they do. Big Law is one of the few companies working on a problem that is widespread in Zim and other similar countries. The problem is that companies, listed or not, don’t seem to see the power of the internet as a business platform even as internet penetration increases rapidly across the continent.

Below is a question and answer we did with Rob Stangroom. He discusses the whole online investor relations concept. How Big Law started and how it has worked out. There are a couple of tips in there as well for business executives, PR and Web professionals.

Big Law’s history?

Big Law was founded by Graham Young, a computer programmer, me a CA and Tafadzwa Manhindi – from a banking background. From a capital markets advisory background I realised how little information there was online on listed companies – stock exchanges weren’t delivering and neither were brokers and neither were portals that purported to have comprehensive timely information. With the oft repeated statements of how much potential Africa had from an investment perspective I was surprised that no-one was actively promoting investment online. Whose responsibility was it?

The answer is listed companies’ as part of their corporate governance obligations:-

This quote from Standard Boardroom Practice, prepared by the Institute of Directors, London, revised 1971 is still appropriate (or perhaps more appropriate) in modern times:

“Although the process of encouraging shareholders to take an interest in the affairs of the company may be a rather slow one, directors should not be discouraged. It is their duty to make the maximum use of the methods open to them of keeping the shareholders informed.”

But what motivates listed company directors to take these governance issues seriously? Not a lot because they are not aware that “the methods open to them of keeping shareholders informed” now includes the Internet – something they don’t understand – too many grey hairs + they are very busy. Just look at the stats. The capital market regulators are similarly unable to take the online agenda and make it a priority or incorporate it into the rules. In the absence of liquid markets, stockbrokers don’t have the resources to make full information available either. So it’s up to listed companies to decide what to do to promote investment – after all they have obligations to do so so it would seem like an easy decision. But it’s not.

Take my survey if you have not and you will get some insight into the issues.

The key issue though is that with the proper software it is easy to manage communication with retail investors and stakeholders – it’s this aspect that saves time and money and makes the process automated low cost and therefore worthwhile. It’s what you call a “retail shareholder” strategy but one that also benefits institutional shareholders since they also have better access to information.

What’s would you say is the Big Law’s core product/service? What did AIC bring to the market and how has this fared?

Our core service is to ensure that comprehensive, timely investment information is published online to enable investors both local and foreign to make informed investment decisions. We have brought awareness of best practices globally to the market and I can say that without a doubt our clients have the best investor relations websites of any stock market in sub-Saharan Africa – this is because they are connecting individually with investors and perpetuating a secure two way relationship – just register on one of our client sites e.g. Seedco, to see the communications module each and every registrant gets

Big Law has corporate clients in Zim, Malawi, Botswana and Zambia. What was the experience expanding into these markets? What were the major setbacks doing so?

Major setbacks are that executives don’t know that they don’t know. Raising awareness of the benefits of communicating responsibly online is very time consuming and costly. A good website will generate very meaningful commercial feedback and enhance corporate reputation.

Executives don’t take smaller investors seriously because they think that it’s costly and time consuming to engage them. With an effectively structured website this is not true. Communication is automated but intervention is possible when needed. Shareholders are also potential customers, suppliers, employees etc… stakeholders if you were, so responsible communication to everyone and anyone online grows “corporate reputation”. This is what you call integrated communication and it’s possible because the Internet has changed the World making information instant to everyone

Major milestones/achievement made in recent months and since founding (e.g. reaching a certain number of clients, new markets, new methods…)

We are launching the website of a prominent stockbroker shortly which will innovatively disseminate investment data on our clients. We professionally podcasted the whole analyst presentation of AICO and Seedco. We launched Edgars new website – a good mix of a corporate website and an investor relations website

Our major milestone can be summarised in this feedback from a global investment bank

Hello,

By way of introduction, my name is <>, and I work at Deutsche Bank providing investor relations guidance and information on global best-practices to companies that have ADR and GDR programs with us. I just wanted to say I saw your new website, and the Investor Relations section is terrific! I spend a lot of time working with companies from emerging markets and promoting the value of a comprehensive, informative, and well-designed and organized website and investor relations sub-section as a major tool in attracting and keeping international institutional investors. It is great to see you are ahead of the curve, I’m really impressed!

Which companies are your competition locally and on the continent?

On the investor relations side we are unique because we fulfill a specific niche – we are not a website company and not a typical PR firm – we are an online communications consultancy concentrating on the basics – timely, comprehensive information. We have branched out to corporate websites as a logical extension to what we do but it’s not our core business.

I guess the typical PR companies and typical website companies are our competition but the PR side is weak online and the website companies weak on PR – there’s space for a company in between and we are that company.

What differentiates your product from competing services on the market?

It’s holistic – it’s not about the website, it’s about how our clients use it and that’s where we are actively involved on an ongoing basis in appraising that. I have a very strong financial sector background and my partner Graham has a very strong database and programming background. Even though we sign up clients, we concentrate on improving awareness at all times – this is no different to any investor relations department overseas – the core objective of an IR officer is to ensure that investor relations is on the agenda for the CEO and the board.

What is your view on the readiness of companies to use the internet as a platform for investor relations and attracting new investment?

There are significant barriers – the cost of the internet etc but penetration is high and growing and if costs come down there will be explosive growth. Those companies starting to use the internet effectively early on will benefit when this growth kicks in. They will also be wiser as these tools evolve over time.

On the investor relations side executives don’t appreciate that without information and access to management investors do not even consider investment – it does not matter how bad things may seem, companies need to provide the facts and let the investor decide – at least he will be able to assess risks and not be in the dark.

No facts = maximum risk assessment – not even on the agenda. Some facts means a qualified risk assessment + the listed company is at least on the radar of the investor. Listed companies need to treat shareholders equally – all of them and this point is frequently overlooked.

However an example here of how local companies are realising the advantages :

Analyst presentations are where all of the key questions are asked of management. Foreign investors effectively do not have access to the raw information of these fora. AICO and Seedco are the first listed companies to professionally podcast their whole investor presentation including the q and a section. In developed markets this is the defacto (as required by regulation – here the regulation does not apply) so here our services our world class and up with best practices worldwide. If companies want to be serious about promoting investment then they have to adopt best practices worldwide. This is so much appreciated by foreign investors.

Any major setbacks getting corporate clients to appreciate the value of the service?

The underlying state of the listed companies in Zimbabwe – many have going concern issues and are seriously struggling – but the catch 22 is that they need investment – yes a website will not necessarily find investors but it only takes one investor to change the fortunes of a listed company so why not “use all the channels available”. Publish all of the information online and enable investors to make educated assessments and at least put companies on investors’ radar.

Few listed companies take their communication corporate governance obligations seriously, few realise that communicating with investors benefits all areas of business.

What are your views on social media as a platform for investor relations? How can (listed and not) use platforms like LinkedIn and Facebook as platforms for business? Are local companies using these tools effectively?

Facebook; approach with caution. Companies need to have the underlying integrity to communicate and content to communicate and the ability to respond immediately and honestly to the market. Get this right and then the platforms are highly recommended but start with the basics and learn as you go along. Include senior management right from the start otherwise there is no buy in.

How has been the feedback from the clients?

Excellent. Directors can rest in peace that their communications use all available channels and that their core corporate governance obligations (the wishy washy stuff that nobody understands – e.g. listed companies should communicate responsibly with the market). For some of our brand strong clients the commercial value of the feedback through our website has been very valuable – business deals etc.

Any major plans for the coming months, year?

• Promote awareness of the need for online investor relations in Zimbabwe.
• Promote use of social media in investor relations more.
• Use stockbrokers websites to effectively market our client investment stories.
• Try to get listed subsidiaries of listed holding companies like to take their online investor relations seriously. Why is it that holding companies overseas treat investors to the best online investor relations but in Africa they don’t – same group, same corporate governance practices. Why is the value of an investor in Africa worth less than in the UK?
• As above for listed companies that are dual-listed – eg Hwange.
• Promote podcasts as a key reporting and transparency tool – this has to be adopted by listed companies in Zimbabwe if they want to be taken seriously then they have to get up to speed.
• We are launching a unique website product for estate agents.
• We are launching a professional website product for small business.

Source: TechZim.com

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Please take our online survey of African online investor relations practices here. 10 questions, 5 minutes. It’s quick and will help us increase awareness to enable listed companies in Africa to improve investor relations communications practices online.

Why do we care? Information is the lifeblood of markets. Educated investors are protected investors. We want to promote investment into Africa to make all our lives better.

Africa will not realise its much talked about potential until comprehensive and timely information on its investment opportunities is disseminated widely and efficiently online for free.

African Is Cool promotes progressive online investor relations practices among listed companies in Africa and manages www.africanfinancials.com, Africa’s largest free portal of online annual reports.

Access the survey HERE

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In many strange ways our managed corporate website and investor relations services, already is consistent with leading online IR practices of the First World. See below. Our stock exchanges in Africa are inefficient in distributing information online for free and widely. Our listed companies do not use newswire services and our brokers (too many of them) are starved of market liquidity (to generate commissions) and under-resourced.

So really its corporate Africa that’s driving its own future (or should be). This is good news and an opportunity for listed companies to build direct influence and grow brand directly – and not rely on others.

The article below, by Dominic Jones, shows how corporate websites in the First World are becoming more and more effective relative to traditional newswire and regulatory news services. African websites (that we manage) are already at that stage (relatively) because of the stage of the development of our markets (undeveloped) and because we have leap-frogged technology to use the best and most efficient tools DIRECTLY for the benefit of our clients. The only significant challenge in Africa is the absence of awareness of the grey haired CEOs that are in control of the decisions. This will change over time.

Herewith Dominic’s article which makes interesting reading. If you are interested in leading-edge online thinking then I do recommend that you sign up to his website email alerts. Dominic’s approach taking on the established monoliths in the media world is very refreshing.

Attributed to Dominic Jones, IR Web Report‘s founder and an online investor relations consultant.

STATISTICS from trackable links in company press releases suggest that even small companies’ websites are the most heavily used sources for financial disclosure information and that dissemination via PR wire services is mostly ignored by investors.

The public statistics bust the widely held misconception among investor relations professionals and securities lawyers that PR wire services are the most effective way for companies to achieve broad disclosure. They show that while PR wires distribute company releases to hundreds of different intermediaries such as a financial portals, there is little or no evidence that investors use PR wire releases.

The statistics also explode the myth that only large, widely followed companies’ websites can be used for disclosure under the US Securities and Exchange Commission’s (SEC) 2008 Regulation FD guidance, which states that postings on company websites can meet fair disclosure requirements if they meet certain standards, including that investors actually use the sites. The statistics indicate that even at small-cap companies, websites, email lists and social media accounts are the primary channels through which investors now receive investor relations information.

Disclosure dissemination practices fall behind

In the three years since the SEC issued its guidance on the use of company websites and blogs for disclosure, only a handful of companies have changed their disclosure practices to use their websites and SEC filings rather than PR wire services as the primary channel for their disclosures to investors. Those that have made changes include Google Inc., which no longer uses PR wires for its earnings releases, and small-cap BGC Partners, which uses an advisory release method to alert investors to full-text disclosures on its website.

The lack of progress towards so-called web disclosure is likely due to several contributing factors. US Stock exchanges still favor PR wire services in their rules and discourage companies from pursuing web disclosure, even though their rules do not expressly prohibit it. Nasdaq OMX owns PR wire service GlobeNewswire while NYSE Euronext offers subsidized press release services to its listed companies.

Another limiting factor is a general lack of awareness of new real-time web technologies among companies, their advisers and some web service providers. PR wire services have exploited this lack of awareness as they seek to preserve their lucrative disclosure dissemination franchises by sowing misinformation and creating doubt among cautious companies.

However, the biggest barrier to the adoption of web and social media channels for disclosure has been the widespread misconception in the industry that PR wire services are both the most effective means of disseminating disclosure information and that they meet companies’ disclosure obligations under Reg FD. Consequently, companies continue to collectively spend many millions annually on PR wire services even though SEC filings provide more certainty of compliance and many companies are in a position to replace PR wire distribution with website postings under the SEC’s 2008 guidance.

Click stats show where investors interact with company news

Now, publicly available information about investors’ use of links in news releases calls into question the effectiveness of PR wire service distribution and suggests that investors mostly access disclosure information directly from company websites, email alerts, RSS feeds and real-time messages on social media platforms.

The statistics are provided publicly by URL shortening services such as Bit.ly and Goo.gl. They enable anyone to view where investors are when they access and click on shortened links in press releases. The statistics these services provide are more reliable than the statistics that PR wire services offer to their clients because they are not affected by investors’ browser settings, non-human activity such as search bots, or by the format choices of the PR wires’ distribution sites.

Some companies use services like Bit.ly to shorten long links to webcasts and other information in their press releases so that the links don’t break when the releases are distributed in emails or posted on some websites. When investors click on these links the short link is decoded into the original long URL and a click is recorded by the shortening service. Anyone can access the click statistics for these shortened links by appending a + sign to the end of the URL.

Information recorded by the link shortening services includes referrer information, which is the location where investors viewed the release and clicked on the links. When the links are clicked on a public website such as Yahoo! Finance, the shortening service can easily track and record this information. However, if the link is clicked via a user’s email program, in one of a number of social media clients such as Tweet Deck, or if a user pastes or types the link directly into their browser, the referrer cannot be tracked and the click is recorded as a “direct” click.

For more than a year, we have been monitoring PR wire services for public company releases that contain links that have been shorted using the Bit.ly service. Unfortunately, very few companies shorten the URLs in disclosure releases using Bit.ly so examples are few and far between. However, in every case that we have looked at, few if any of the clicks can be tracked back to PR wire service distribution points, while company websites and direct access clicks from emails and the like are typically the most common referrers.

The finding that company controlled channels account for more click activity than PR wire service distribution holds true regardless of company size. This is an important point because it suggests that many more companies could be using web disclosure than was previously thought.

Below we provide information from three public company releases that included trackable Bit.ly links. Two are from small, lesser known companies and one involves Dow Jones Industrials constituent The Boeing Company (NYSE: BA)

Example 1:  State Auto Financial Corp

On April 28, 2011, State Auto Financial Corp (NASDAQ: STFC) issued a news released via Business Wire announcing a webcast of its upcoming annual meeting. The second paragraph of the release included a link to the webcast registration page that was shortened using Bit.ly.

According to a Google search, Business Wire distributed the release to scores of websites including the most visited finance portals such as Yahoo! Finance, MSN Money, MarketWatch, Barron’s, Reuters, Bloomberg and Morningstar.

According to Bit.ly, of the 116 clicks on the short link in STFC’s release only 3 clicks can be attributed to Business Wire distribution points, namely Yahoo! Finance (1 click), StreetInsider (1 click) and SNL.com (1 click).

STFC’s own investor relations website, which is hosted by IR website provider InvestQuest.com, generated 10 times as many clicks (34 clicks), while clicks from direct sources such as email, Twitter clients and manual browser entries generated 75 clicks, or 65% of the total. STFC provides an email alert utility on its IR website for news releases and SEC filings.

These figures appear to show that distribution of STFC’s release via Business Wire was largely a waste of time and effort and that up to 94% of the audience reacted to information received from the company’s own website or email alerts.

This suggests that STFC, which has a market-cap of $650m, is well placed to use its website and SEC filings to comply with Reg FD and to communicate its essential information to investors.

Example 2: Sonus Networks, Inc.

On June 1, 2011, Sonus Networks (NASDAQ: SONS) issued a news release via PR Newswire announcing the date for its upcoming investor day in New York City. The release advised investors that they need to pre-register to attend the event and provided a Bit.ly link to a page on the company’s website where they can do that.

According to Google, PR Newswire distributed the release to about 144 finance and news websites, including Yahoo! Finance, Reuters, Business Insider, Barron’s and dozens of smaller news outlets.

Sonus uses a website from Shareholder.com that offers an email alert utility that distributes the full-text of releases to subscribers. The company also issued a message containing the bit.ly link on Twitter, where it currently has 487 followers.

According to Bit.ly’s click stats, the short link to the investo day registration page was clicked a total of 21 times, of which only 2 clicks can be attributed to PR Newswire partner Yahoo! Finance. More than 90% of the clicks appear to be from the company’s own web channels, including 15 clicks from email alerts and Twitter messages viewed in client software, 3 clicks from the company’s IR website and 1 click from the Twitter website.

Here again, there is negligible evidence that PR wire distribution is effective, with only one of PR Newswire’s distribution points registering clicks. The company’s own web channels appear to the primary way that investors get information from Sonus.

Example 3: The Boeing Company

On December 20, 2010, The Boeing Company (NYSE: BA) announced that it was increasing production of its 777 aircraft. The release, which was distributed via PR Newswire, included a Bit.ly shortened link to a video about the 777 program. As the only link in the widely distributed release, it was very prominent.

Boeing posted the release on its website and also distributed the full-text to its email list subscribers.

According to Bit.ly, the release generated a lot of interest with a total of 1,757 clicks. Boeing’s own websites generated by far the most clicks, with a combined 917 clicks across three sites, or 52% of the total. Email and the like generated a total of 610 clicks or 35%.

PR Newswire’s own website accounted for 32 clicks or 2% while Yahoo! Finance accounted for 15 clicks or less than 1%. The bulk of the remaining clicks were made up of traffic from industry publications.

Overall, the click statistics suggest that up to 87% of people who are interested in Boeing receive their information directly from the company rather than from PR wire distribution sources.

Summary and limitations

These click statistics and others that we have reviewed provide strong evidence that PR wire distribution is not as effective or as well used as companies’ own website channels.

This has potentially important compliance implications for how companies and their legal counsel approach their disclosure dissemination practices. Reg FD places the onus on companies to ensure that any alternative channels to SEC filings they choose to use are in fact reasonably designed to result in broad, non-exclusionary distribution.

Of course, there are limitations to using click statistics. By definition they track only those instances where people actually click on a link. They cannot tell us how many times releases are read but people don’t click on the links. Nonetheless, on a relative basis it is clear that company channels are likely being read much more often than releases distributed by PR wires.

Another limitation is that it is impossible to know the source of the emails and other direct sources of clicks. In addition to company email alert utilities, PR wire services also may have subscribers who received these releases via email. However, the relatively poor showing of the PR wires’ own websites in the click statistic suggests that their own channels are not widely used for company disclosure information.

Finally, while they are consistent with a number of other companies we have reviewed, these results are for a limited number of companies and may not hold true in all cases.

Next steps for companies

To comply with their regulatory obligations and best serve the information needs of their investors, companies should seek to understand what channels their investors are using.

Shortening URLs in releases using Bit.ly is the best way to do this because Bit.ly has invested heavily in systems and technologies to provide accurate statistics. PR wires’ own statistics are not reliable and are unable to track all clicks. Additionally, PR wires may be overstating traffic because they are less effective at stripping out non-human web activity, such as search bots.

Once companies have better insights into how and where investors are using their information, they can make informed judgments about moving to a web and social media disclosure dissemination system coupled with SEC filings.

This may include adopting new procedures such as relying on SEC filings for compliance, and using company owned web channels and new real-time technologies to effectively communicate information to investors in the formats they prefer and through the channels they actually use.

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You have signed up to Linkedin.com and it BUGS you that you don’t know what to do next. LinkedIn.com is a powerful executive networking tool that is free (well almost). I recommend it strongly to those executives that seek to extend their company’s influence online (and indeed their own). I have posted a few tips on how to use Linkedin.com below. These are my tips and not necessarily those of Linkedin.com – although they probably overlap.

Here goes:-

• Use it actively and regularly – don’t forget – it takes a long time to build your profile online so start early and do it often.
• Complete your profile 100% on Linkedin
• Put a decent photo of you online. If you are ugly, where a suit and a tie it softens the blow for the reader.
• Import all of your email contacts into Linkedin – see who is also on Linkedin.com too (there’s a little flag) and invite them to join. Do this once every three months – the additional contacts you have met will be added to your Linkedin account
• Go through each contact you have imported and invite each one individually OR send them all an invite at once : not recommended as you will annoy people that you have not spoken to for some time
• Put your Linkedin personal icon image on your website, blog etc and invite people to get in touch
• See what Linkedin.com groups are profiled to your business e.g. African hospitality or hotels or accommodation. Go to the group profile and see the number of members – if there’s 30 members probably not worthwhile joining (unless its specific to you ie that group may be influential in what it does), if there’s 4,000 members its a good source of coverage.
• For every material release of information from your company website, link that, and publish it into the groups you have joined, with your commentary thereon. In Africa many executives join the same groups and this is why its important to join a few big groups and not lots of them.
• Use wording above that is direct and gives the reader a reason why he should read your post – saying “Press release No 43″ is not good. Saying that 40,0oo carats of diamonds are for sale at firesale prices will attract attention…… from the cops.  So make it appropriate to your business and what you do. Keep it short. Use things like “Top 10 tips for hoteliers” or “Give us your favourite hotelier quote” or whatever. Linkedin can be a bit like Facebook, in that every now and then there’s interesting discussions online, tick the box to follow them, actively participate in them and contribute meaningfully – dont waste time.
• Think about whether you want visitors to your Linkedin.com to see all of your contacts and link to them. If your relationships are proprietary then set the setting not to show your contacts to anyone
• Think about whether you could set up your own group online to discuss things relevant to your business and sphere of influence
• Link your website disclosures automatically to appear in your Linkedin.com account and your Twitter and Facebook
• Put your corporate online presentation online under your profile
• Put what books you are reading online. If its the Khama Sutra then thats probably inappropriate (but may attract lots of readers). Put intellectual books online, like War and Peace, Wuthering Heights, The Ascent of Man, Romeo and Juliet. This accentuates your intellectualism. No don’t. Just put online what you are reading.
• Link your blog post to automatically appear in your Linkedin account.
• Regularly update your status – what are you doing on a strategic level.
• Ensure that every press release that is released by your company is published on your profile.
• Do not accept all LinkedIn.com requests – read the profile of the person that you might link with, are they likely to find what you have to say every now and then interesting. And vice versa. Do you really want to like with the person on the other side? For people looking for work bombard them with due diligence info and get them to courier their FULL details to you before you consider them. If they do that they are serious.
• Put your company profile on Linkedin too
• Be aware that having all of your staff online is effectively a HR shopping menu for your competitors – and vice versa.
• Put your Linkedin.com address on your business card

One last thing to bear in mind is to keep your contacts updated with what you are doing – you can only send messages to 50 contacts at a time so its a hassle and it takes time.

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