SYLLABUS/CHAPTERS COVERED

L1: Strategic Financial PR:

 Definition
 Understanding the scope of strategic financial public relations

L2: Investor relations and Reputation Management : Focus on this week

L3: Financial Publics- Part 1

 Investors : Individual and institutional
 Media
 Regulatory bodies : Bursa and Security Commissions

L4: Financial Publics -Part 2

 Portfolios managers
 rating Agencies/Investment advisory services
 analyst
 others 1
 LECTURE 2
L2: Investor relations and Reputation
Management
 Financial Publics
 Types of CORPORATION
 Understanding the scope of investor relation and
reputation management
 RECAP
INTRODUCTION TO INVESTOR RELATIONS

Investor Relations (IR) - public listed company organize and conducts itself in effective two-way
communications with its shareholders.

The financial community and other stakeholders with the objective of accurately representing

of capital. are
the company, achieving a fair market value for the company’s securities and lowering its cost
.
 The IR function requires a unique combination of expertise

Academic or professional background in business, finance or accounting

Experience in investment management or as an analyst ie. appreciation of what the market needs
and how the capital markets work

Familiarity with all relevant regulatory requirements.

A sound knowledge of the company, its activities and prospects.

Ability to utilise a variety of corporate and financial communications channels.

are
Ability to develop the key IR messages ie. to translate. complex corporate financial and
technical data into an understandable form; and
Presentation skills utilising modern communications skills.

“People skills” : An effective IR programme revolves around many relationships, both inside
and outside the company. The IRO should be able to develop and maintain these
relationships.
REFLECTIVE FROM CHAPTER 1: INTRO TO IR

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 TESTING YOUR UNDERSTANDING: Answer TRUE/FALSE
Public relations is about one-way communication
from the business to stakeholders:
Shareholders are considered as an internal
stakeholders.
Investor relations is the specialized part of corporate
public relations that builds and beneficial
relationships with shareholders and others in the
financial community to maximize name/Value
IR objective is to achieve regulatory requirement
from private traded shares:
Finance Journalist is one types of financial media
Increasing capital cost is main function of IR
When there is no investor relations function, investors
must rely on beat media.
key reason for building an investor relations
department is to maximize the company’s share value:
IR is a specific sub-discipline of public relations:
Investor relations practices must be tightly integrated
with a corporation’s accounting department, legal
department, and TOP executives
Develops and monitors performance metrics for the
investor is investor relations function
Publics are one of the examples of investor
Building long term relationship with the general
community is benefits of a good IR Team
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FINANCIAL
PUBLICS INVESTORS

ANALYSTS AND THE

MEDIA

FINANCIAL MEDIA

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 1. INVESTORS

Investor is referring to an individual or institution or professional

association or anybody who are interested to be a part of your
company through purchasing shares/investing capital

are .
It involves matching the investment style of the investor with the
company’s characteristics.
TYPES OF INVESTOR

are .
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 2. ANALYSTS AND THE MEDIA

• Analyst coverage is important to increase the company profile.

• Pension funds, insurance companies, unit trusts and fund managers use analysts’ research reports in making
their investment decisions.
• Analysts tend to focus on stocks which generate interest. Well followed companies may have several analysts
covering their stock.
• BursaMKTPLC: GAMU.KL (bursamarketplace.com)
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3. FINANCIAL MEDIA

• When it comes to reaching the widest audience, the financial media continues to be a most effective tools.
• News, events and results can be disseminated to all classes of investors.
• Articles or broadcast media presentations from reputable financial commentators and analysts can have
considerable influence.
• It is important, therefore, that good relationships are maintained with leading journalists and the financial press,
broadcast and electronic media.
• The objective is to develop strategies to obtain coverage of the company and to create a climate of interest and
positive opinion.
• Corporate development, or profiles of key members of management coverages are commonly covered in
financial media.
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Class Activity

• https://www.menti.com/alaivcvypgj1

• https://www.menti.com/aldofb1egec4

• https://www.menti.com/alaqd3uy74w2

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TYPES OF COMPANY IN MALAYSIA

• There are several types of companies allowed to carry out business here. Among those, below are four of
the most popular types of company formations in Malaysia:
1. Public Limited Company(Berhad)
2. Private Limited Company (Sdn Bhd)
3. Sole proprietorship
4. Partnership
WHAT is PUBLIC LISTED COMPANY?

• A public listed company is one which usually has a BHD which is short for Berhad. (This is the BM term for limited).
• The Berhad or BHD denotes Public Limited Company in Malaysia.
• Most companies (or businesses) use Sdn Bhd which means Sendirian Berhad which indicates that they are a private limited
business which means they do not have public shares (Fortune.my)
• Once a business is registered with the Suruhanjaya Syarikat Malaysia (Companies Commission of
Malaysia), if the businesses transact on the official stock exchange, it will be considered as a listed
company in Malaysia.
• Companies that wish to be listed on a stock exchange must first meet all the listing requirements of that
exchange and include the number of shares listed and the minimum earnings level of the company.
• Financial statement of a BHD company bound to be disclosed.
• Berhad companies are all big businesses, unlike private limited companies which are usually preferred to
be small to mid-sized enterprises.
listing a company in Malaysia?

• If you have a plan to go under bursa Malaysia listed company, you must consider several key requisitions
from the Security commission or SC of Malaysia.
• Below are the checklists you should consider reviewing before proceeding for company listing:
1.Make sure the company has enough financial support to bear the responsibility implied by the stock
exchange.
2. It must be ensured that the company invests sufficient time and potentials of listing compliances.
3. Keep in touch with your current and potential future investors by strengthening the means of
communications once your company is listed.
4. Make sure the intended company meets stakeholder’s business objectives when listed.
BREAK TIME
BREAK TIME

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 REPUTATION MANAGEMENT

As noted by Argenti and Forman (2002), corporate reputation represented the collective effect of
constituencies’ image or perception that they have cultivated.

The success of an organisation contributed directly to its reputation.

This perception was built upon the similarity between the message that was sent out by the
are
organisation through their corporate identity (tangible elements: symbols, name, logo) and the
.
message that is received and understood by its constituencies (corporate image / perception).
Corporate Reputation and Investor Relations

• Investors tend to assume that good investment opportunities come from ‘ good ’ companies, that is from
companies with a high reputational rating ( Shefrin and Statman, 1995).

• Corporate reputation should be viewed as ‘ a stakeholder ’ s overall evaluation of a company over time (2001:
29).

• Good reputation allows it to charge premium prices, attract better applicants for its workforce, attract
investors, and lower its cost of capital, making it one of the firm ’ s most important intangible assets.

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REPUTATION
MANAGEMENT
CORPORATE IMAGE

CORPORATE IDENTITY

CORPORATE REPUTATION

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The differences between corporate identity and corporate image
as noted by Napoles (1988) are

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Corporate Reputation

• Companies manage their reputations mainly for financial reasons.

• Reputation can be summed up as the consensus view about an individual or a company.

• A corporate reputation is a stakeholder's overall evaluation of a company over time.

• Evaluation is based on the stakeholder's direct experiences with the company, any other form of
communication and symbolism that provides information about the firm's actions.

• Reputation is overall assessment of organisations by their stakeholders- aggregate perceptions by

stakeholders of an organisation’s ability to fulfil their expectations.

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Corporate Reputation

• The success of an organisation was determined by its reputation, which was reflected by the alignment of the
organisation’s identity and image conceived within the constituencies (Argenti, 2007).

• Without proper reputation management, the image/reputation of an organization can be severely damaged.

• Firms with higher reputations are linked with sound financial performance (Roberts & Dowling,
2002), higher customer loyalty (Bartikowski, Walsh, & Beatty, 2011), and, greater satisfaction of key
stakeholders such as: customers (Walsh& Beatty, 2007),employees (Chun & Davies, 2010) and
investors (Helm, 2007).

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Corporate Reputation

• A sound understanding of a company and a good reputation will increase its attractiveness as an investment,
help to stabilize its share price, reduce its vulnerability to takeovers and increase the credibility of its
communications.

• One recent survey found that 91 per cent of institutional investors regard analysts as their main source of
information about individual companies.

• They will study companies in those sectors closely and will be in a better position than anyone else to
evaluate a company's performance and prospects, its strengths and weaknesses.

• Business and financial journalists play a crucial role both in dissemina­ting information and in influencing
opinion.

• Their choice of running favourable or unfavourable stories about a company or the interpreta­tion they
choose to place on those stories will influence the opinions of those who read them.
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Corporate Reputation Framework

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3 elements of corporate reputation

Brand reputation Organisational reputation Stakeholder reputation

• how the public perceives a • what the public think abt the • the reputation that
brand organisation as oppose to the stakeholders have of the
brand. brand or the company that
they are dealing with,

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DIMENSION OF CORPORATE REPUTATION

Ability to Quality Social Quality Innovative Wise use Financial Long Custom Internati
attract Manage Responsi of of soundness term er onal
and ment bility to product corporat invest committ Business
communi and e assets ment ment /
Retain ty and services value Globally
talented
environm
people
ent

REPUTATION

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Measuring impact of Investor Relations

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Corporate Reputation
TOOLS

CHANNEL AND
COMPANY EXAMPLE

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CASE STUDY PRESENTATION
IN a GROUP, SELECT ANY TWO ORGANISATION
AND IDENTIFY WHO PERFORMED WELL BASED ON
REPUTATION PERCEPTION FROM PUBLICS.
YOU CAN CONSIDER IN SELECTING INDICATORS
BY YOURS OR FOLLOW FROM BELOW:
1. COVERAGE IN NEWS
2. ANALYST
3. WEBSITE
4. NEWSPAPER
ETC: csr/press release/interview/annual report
day/investor day
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Select company
select indicator:
WEBSITE: financial announcement- corporate reputation
from investor
ANALYST: NO: GAMUDA: 6 ANALYST COVERAGE
(RHB/AFFIN.TAKAFUL)
WEBSITE: CONTACT: GIVING DETAILS WHO
SHOULD CONTACTED FOR INVESTING

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