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  • 2010/12/14
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European Corporate Survey 2010: what investors think today:CEOs and CFOs must dedicate more time to financial communications

CA Cheuvreux announces the results of its 2010 European Corporate Survey, a survey of 370 institutional investors across Europe and the US on corporate access and financial communications. 76% of respondents were long-only investors and 11% were hedge funds.

Key findings of the survey:

  • For the majority of investors surveyed, an investment decision is four times more likely to be made following a meeting with a CEO or CFO than after a meeting with a Head of Investor Relations, due to management’s in-depth knowledge of strategy and decision-making power. This is a particularly strong trend with UK and US investors, over 50% of whom considered the probability of an investment decision after an IR meeting to be almost zero.
  • Nearly nine out of ten investors believe that the best channels for meeting corporate executives are either through road-shows or conferences. UK and US investors in particular value company management coming to their offices at their request. Hedge fund investors showed a clear preference for access to management, with 100% noting it as important or very important. Site visits and investor days are the least sought-after means of access.
  • For 91% of investors, medium-term guidance is the key investment barometer, with sales, earnings and margins as the most sought-after metrics. However, 27% of investors do not attach any importance to short-term guidance, believing that these figures are already discounted in the share price.
  • The financial crisis has had a considerable impact on 49% of respondents’ portfolio rotation policies with 33% carrying out their portfolio rotation policies more rapidly.

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Bénédicte Thibord, CA Cheuvreux’s Global Head of Marketing Services, said: “This survey demonstrates that in order to develop a supportive shareholder base, management must now commit more time to investor relations. Management presence on roadshows, at conferences and in face-to-face meetings with potential investors makes an investment decision four times more likely.”
Jenny Murphy, Head of Corporate Access at CA Cheuvreux, said: “A key finding in the survey is that investment-decision timeframes have also changed. In effect, 40% of investors now take their decisions more quickly, whilst only 8% take them more slowly. The constitution of their portfolio and the number of lines in the portfolio remain unchanged by the crisis.”