African Investor Relations

According to Ashley Bendell of Exotix,  the  IMF published its World Economic Outlook yesterday. It contains revised forecasts for the world economy and of course, Africa. See attached for selected countries.

Key highlights are sizeable upward revisions in GDP growth expected for this year for:

• Nigeria: now 7.0%, +2pp from October report (closer to our bullish 7.6% forecast)
• Mauritius: now 4.1%, +2.1pp
• Botswana: now 6.3%, +2.2pp
• Kenya’s 2010 forecast moved up to 4.1% from 4.0% (in October).

Inflation is generally falling or stable.

Download the full forecast report here…

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Legislation and regulation in most African capital markets are not as strict as those in other markets and therefore corporate liability not as high. Progressive investor relations practices are therefore not as prevalent. However, according to AIC, the rapidly growing Internet access across the continent and the fact that many investors in African equities are a global community, the potential to build a relationship and communications with investors online is enormous. AIC’s Online IR Awards reward the pioneers in this field.

Online investor relations practices comprise strategic management responsibilities that integrate finance, communication, marketing and securities law compliance to enable the most effective secure two-way communication between a company, the financial community, and other constituencies, which ultimately contributes to a company’s securities achieving fair valuation.

Category	:	Best Online IR Programme 2009
Winner	:	African Sun Limited
Key_criteria	:	Comprehensiveness of data published online Profile of website feedback Commercial returns from website feedback Timeliness of posting data online Diversity of media use Enhancement of the IR function
Comment	:	African Sun received our top prize for its balanced online IR programme implemented over the past year. African Sun’s www.africansuninvestor.com provided equal focus on investors as www.africansunhotels.co.za provided on customers. Their transparent investment thesis, comprehensive website data, a new CEO blog and strong business growth all contributed toward positive ratings. African Sun received excellent ratings for the timing and nature of feedback provided to the queries submitted online. The key aspect, however, that enabled African Sun to clinch the award was the commercial value of the feedback they received through www.africansuninvestor.com. A pity that their share price has yet to respond.
Category	:	Best Performance 2009
Winner	:	Econet Wireless Zimbabwe
Key criteria	:	Share price performance for the period under review
Comment	:	Econet Wireless has staged an unbelievable operational comeback less than a year since Zimbabwe’s hyper-hyper inflation forced the economy to re-start from ground zero through dollarisation. Throughout this period, Econet’s management could see the other side of the crisis and invested heavily in ensuring that when the US dollar replaced the local currency, they were in a strategic position to take advantage of it. This happened and continues to happen and the share price responded accordingly, recording the highest gain compared with other AIC clients for the period under review.
Category	:	Best Investor outreach 2009
Winner	:	Copperbelt Energy Corporation plc.
Key criteria	:	Geographic diversity of website traffic Number of unique website visitors Number of website page views Conversion ratio of visitors into registered InvestorPass™ visitors
Comment	:	CEC’s website analytics speaks for themselves: Amongst AIC’s clients, the company enjoyed the highest number of page views, the highest number of unique visitors, and highest number of visits from over 100 countries. Now that CEC has settled into its online IR programme following its launch in February 2009, tangible commercial benefits are starting to accrue through feedback to their website. CEC is a unique infrastructural public investment opportunity, which contributes to it being the radar screens of investors around the world.
Category	:	Best CEO blog 2009
Winner	:	Geoff Goss of Celsys Limited
Key criteria	:	Frequency and consistency of blog posts Blog content Insight and motivation in content
Comment	:	Geoff Goss has habitually provided an excellent blog to complement Celsys’ investor relations website on www.celsys.co.zw. His jovial views into the pain suffered by Zimbabwe managements over the past few years have been extraordinarily insightful. Yes, the CEO blog doesn’t exactly have millions of visitors every day, but the message we get from Geoff – and it’s a message that we give to all our clients is that every effort should be taken to inform shareholders through many different media. It only takes one investor to change the fortunes of a company and so the effort is worth it.
Category	:	Best IPO Online Investor Relations 2009
Winner	:	Telekom Networks Malawi Limited
Key criteria	:	Investor responsiveness before, during and after the IPO Website interactivity before, during and after the IPO Online prospectus
Comment	:	We only had one participant in this category, but there are some significantly unique aspects of this transaction that you will not have seen in any other African IPO. Firstly, regulatory approval was obtained to distribute the prospectus online with an application form. Secondly, the majority of TNM’s investment community was identified in InvestorPass at IPO stage. This secure two way communications platform has been key in merging corporate strategy (i.e. brand enhancement) with investor communications. TNM’s outreach measured by the number of countries visiting www.tnminvestor.com was AIC’s highest at 112.
AIC’s inaugural annual awards recognises the performance of AIC’s online investor relations clients during the previous calendar year.

Based on best investor relations practices, modified for African markets, African Is Cool (“AIC) uses corporate investor relations websites to create and grow an online investment community with which companies communicate, and from which they can receive feedback. The bigger the online community, the lower the costs of communication, the greater a company’s influence and the more efficient their communication.

Website feedback brings business deals, lowers the cost of doing business and gives listed companies the ability to modify corporate strategy. Because AIC’s services are unique they do not conflict with companies’ current financial reporting, IT, PR or marketing initiatives. In contrast, AIC services complement them.

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Nine Botswana companies attended our investor relations presentation on “How to integrate investor relations into corporate strategy profitably”. Three other professionals kindly presented their perspectives on investor relations:-

• Hiran Mendis, CEO of the Botswana Stock Exchange (BSE)
• Alun Thomas, CEO of Imara Africa Securities
• Steve Pezarro, founder of Corpserve Botswana

Click on the names above to access the presentations given where applicable.

My presentation follows:

(Please note that the embedded links within my presentation cannot be viewed - email me here if you want the full presentation)

Hiran outlined the BSE’s strategies toward trading, clearing and settlement automation in the future, the exchange’s efforts to broaden share ownership, and the imminent new listing rules. Electronic communications are supported by Botswana legislation and rules, but have yet to take off. I like the Botswana Stock Exchange website – it is one of the more progressive websites in Africa.

Steve Pezarro spoke about the current challenges of being at the coal face of investor feedback, pointing out that in many instances, registrars were asked to be the providers of information that should come from other sources. Many investors visited or called Corpserve just to ask for investor information. The absence of a single source of data for investors was an obstacle to efficient shareholder administration.

Alun Thomas reiterated what many of the other pan African analysts have said in our other presentations: that the distribution of the annual report is paramount to the investment decision. Less than 30% of the annual reports of African listed companies that should be online are online and Botswana statistics were similar.

The statistics below, a crude but effective measure of shareholder communication practices, show how Botswana fares in the use of websites to communicate investor information.

Botswana has a robust democracy, a strong economy and a lot going for it. This message should be included in the investment proposition of many, if not all listed companies in Botswana – something that can be achieved effectively using the internet.

As for my message: It’s possible to ensure that the cost of enhanced communications is integrated seamlessly with your corporate strategy in a way that is hassle free and pays for itself many times over.

Ask for a proposal to grow your business using shareholder communications here ».

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