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Targeting Targeting guide guide Europe

Asia

Americas

Top 15 cities by US equities under management, as at the third quarter of 2009

Oslo

Edinburgh

Stockholm

Copenhagen

Tokyo

Managed sums, $ bn

Winnipeg

London

217.0

Toronto

106.0

Oslo

57.3

Tokyo

50.5

Paris

29.8

Frankfurt

27.9

Edinburgh

27.8

Stockholm

24.1

Zurich

24.1

Beyond public data

Geneva

17.0

Of course, the publicly available data used to compile this map show just part of the story. The investment arms of Middle Eastern and Asian states, or sovereign wealth funds, that came to the rescue of financial institutions in the West during the banking crisis do not show their holdings in public filings. Anecdotally, IROs report a drop-off in interest by Middle Eastern investors in 2009.

Heerlen

16.7

Montreal

16.5

Dublin

14.6

Toronto

Montreal

Dublin London

Heerlen Frankfurt Paris Zurich Geneva

6 IR GUIDE

Building an international IR program

Copenhagen 11.7 Winnipeg

9.7

Building an international IR program

Source: Ipreo

IR GUIDE 7


Full name Nickname(s)

Founded Ground President Manager League 2012–13

Fußball-Club Bayern München e. V. Der FCB (The FCB) Die Bayern (The Bavarians) FC Hollywood Stern des Südens (Star of the South) Die Roten (The Reds) 27 February 1900 (113 years ago) Allianz Arena(capacity: 71,137) Uli Hoeneß Jupp Heynckes Bundesliga Bundesliga, 1st

Full name Nickname(s)

Founded Ground Full name Nickname(s) Founded Ground President General Manager League 2012–13

Ballspielverein Borussia09 e.V. Dortmund Die Borussen (The Borussians) Die Schwarzgelben (The Black Yellows) 19 December 1909; 103 years ago Westfalenstadion (capacity: 80,720) Reinhard Rauball Hans-Joachim Watzke Jürgen Klopp Bundesliga 2nd

Chairman Coach League 2012 Clausura

Club Olimpia El Decano Rey de Copas Franjeado El Expreso Decano La "O" July 25, 1902 Estadio Manuel Ferreira, Asunción (capacity: 22,000) Oscar Caríssimo Netto Ever Hugo Almeida Primera División 6th

Full name Nickname(s) Founded Ground President Manager League 2011–12

Fudbalski klub Crvena Zvezda Beograd Crveno-beli (The Red & Whites) Zvezda (The Star) 4 March 1945 (68 years ago) Red Star Stadium, Belgrade (capacity: 55,538) Dragan Džaji Ricardo Sá Pinto Serbian SuperLiga Serbian SuperLig


Full name Nickname(s) Founded Ground Owner Chairman Managers League 2012–13

TSV Bayer 04 Leverkusen e.V. (Club) Bayer 04 Leverkusen Fußball GmbH Werkself (Factory Squad) Löwen (Lions) 1 July 1904; 108 years ago BayArena (capacity: 30,210) Bayer AG Wolfgang Holzhäuser Sami Hyypiä Sascha Lewandowski Bundesliga 3rd

Full name Nickname(s) Founded Ground Full name Nickname(s) Founded Ground Chairman Manager League 2011–12

Football Club Twente The Tukkers The Reds Pride of the East 1 July 1965; 47 years ago De Grolsch Veste, Enschede (capacity: 30,205) Joop Munsterman Schreuder Eredivisie Eredivisie, 6th

Owner Chairman Manager League 2012–13

Manchester City Football Club City, The Citizens, The Sky Blues, The Blues 1880 as St Mark's (West Gorton). On 16 April 1894 City of Manchester Stadium (capacity: 47,726) Sheikh Mansour bin Zayed Al Nahyan Khaldoon Al Mubarak Brian Kidd (caretaker) Premier League Premier League, 2nd

Full name Nickname(s) Founded Ground Chairman Manager League 2011–12

Association Sportive Saint-Étienne Loire Les Verts (The Greens), Stéphanois, ASSE 1919 Stade Geoffroy-Guichard, Saint Étienne (capacity: 35,616) Bernard Caiazzo Roland Romeyer Christophe Galtier Ligue 1 7th


Proxy voting IR magazine

IR magazine Proxy voting

Canada In Canada – as elsewhere – pressure has mounted for executives to forgo their bonuses. Gord Nixon, the chief executive of Royal Bank of Canada, made headline news when he handed back his C$5 mn ($4 mn) bonus in early February. ‘The major banks released their proxy circulars recently and, in almost all instances, the CEOs gave up their bonuses,’ says Stephen Griggs, managing director of the Canadian Coalition for Good Governance. Interestingly, and in contrast to other markets, the government has not mooted plans for regulation of executive compensation. ‘The option exchange plan has not made its way to Canada and institutional investors there have said any exchange of this nature would be unacceptable,’ Griggs adds.

Spain

UK

According to proxy voting agency Manifest, AGM turnout in Spain is among the highest in Europe. But if Spanish firms want to encourage participation from investors outside Spain they will need to be faster in circulating meeting documents prior to the meeting. ‘The key thing will be the production and communication of documents in English in advance of the meeting,’ says Iain Richards, head of corporate governance at global insurance group Aviva. ‘There are some countries where you don’t get the report and accounts until after the meeting, and Spain was particularly bad on this last year.’

Many are expecting higher abstentions on director reelections, and companies such as Barclays and UK retailer Marks & Spencer have taken the step of putting all their directors up for reelection at the AGM in an attempt to appease investors. This year will see equity-raising issues become paramount, with many firms desperately seeking new capital. Expect investors to be paying close attention. ‘It’s inevitable there will be dilution and issuers and advisers need to be careful in these areas,’ notes Iain Richards, head of corporate governance at global insurance group Aviva. ‘Suggestions from the sell side that you can ignore the rights of existing shareholders are just plain wrong.’ As investors’ frustration increases, Richards think companies could see increasing opposition on remuneration votes. ‘If companies ignore their investors, we could see more instances like building firm Bellway in January, when a majority of shareholders voted against its remuneration report,’ he warns. Bellway had planned to pay out its executive bonuses despite substantial share price falls. The vote was the first defeat of its kind in the UK since 2003.

germany United States ‘Voting participation in the US may increase if there are further resolutions offering opportunities for investors to vote on issues such as say-on-pay. Other key resolutions include proxy access, the ability to remove directors, and the separation of chairman and CEO,’ says John Garbutt, director and global head of corporate governance at Halbis Capital Management, part of HSBC Global Asset Management. As several firms embark on an option exchange plan, paying close attention to the guidelines produced by proxy advisory firms will be key to getting shareholder approval. Advisers say plans will have to be a value-for-value transfer in order to be endorsed, and experts speculate that a significant number of issuers are unlikely to get the support of the proxy advisory firms on this issue, something that will force companies to engage with their major shareholders directly.

Switzerland Swiss firms have not always ingratiated themselves with their shareholders. This year, however, the tide is changing as several major companies have agreed to allow shareholder votes on executive remuneration. Nestlé, UBS and Credit Suisse have all agreed to an advisory vote on management remuneration that, although not binding, does signal a change in attitude toward investors. The changes are not across the board, however, and two other firms asked by investors to introduce a say-on-pay measure for shareholders – engineering group ABB and pharmaceutical company Novartis – have refused to introduce the measure. ‘Shareholders have been expounding the concept of clawbacks,’ explains Michelle Edkins, managing director of Governance for Owner’s governance and engagement services. ‘The new rewards system at UBS, the socalled bonus and malus (reward or penalize) plan, presents the concept neatly.’

greece In Greece investors can’t vote by proxy and shareblocking still exists, making it a frustrating market. ‘Greece can be problem,’ says Michelle Edkins of Governance for Owners. ‘Companies often don’t announce the name and details of those standing for the board until the day of the meeting.’

30 March 2009

029-031 F-proxy activists.indd 30

The introduction of Germany’s Risk Limitation Act should increase participation at AGMs. In practice, however, legal experts don’t expect much to change. The prevalence of bearer shares means it is difficult to identify shareholders in the German market and this opaqueness makes the proxy voting chain more protracted than elsewhere. By improving the transparency of share registers, the legislation has the potential to increase communication and investor participation. The act allows firms to suspend the voting or dividend rights of investors that don’t disclose their holdings but, as yet, no blue-chip company has taken advantage of the law. Siemens, which had its AGM in January, was one of the first big firms that could have used the law change. ‘It would be a very time-consuming process,’ comments Tina Luderer from Siemen’s IR department. Roger Kiem, a partner at global law firm Shearman & Sterling, doesn’t expect much to alter. ‘The majority of blue chips have taken the view that it is too complicated and the disadvantages are too high,’ he says.

March 2009 31

10/2/09 12:44:35

029-031 F-proxy activists.indd 31

10/2/09 12:44


MARKET DEVELOPMENT IR magazine Interest abroad

‘But this is not necessarily a consequence of the investment grade status. On the contrary, I think the investment grade status just confirmed something 50 the market was already pricing in. Foreign direct investment ‘You can see that in the performance of the in Brazil 40 Brazilian currency since the start of 2009. It’s relatively stable compared with what has happened to other currencies around the world, like the British 30 pound or even the euro. Also, from an investor perception point of view, I think everyone gives credit 20 to Brazil for what it has done in the last 10 years in terms of solving its most important problems related to its balance of payments.’ 10 Of course, nowhere is out of the woods yet. Global markets have mostly stalled or fallen back since the 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 start of the year; so far, Brazil is one of the exceptions. Source: www.unctad.org By March, S&P had placed around a quarter of sovereign-rated countries on negative outlook. IR magazine MARKET DEVELOPMENT placed to ride And Brazil’s banks have But the country is relatively well BY TIM HUMAN managed to keep their heads out the economic downturn, a fact reflected by its One year since Brazil went investment grade above water, while many in other ratings upgrades last year. After all, upgrades are a countries have sunk without trace consequence of investment that has already occurred, Impact of upgrade spiked by credit crunch or needed emergency resuscitanot a cause of it, notes Paulo Vieira da Cunha, a tion. Earlier this year Banco Stock Itaú formerother director at Brazil’s central bank who is now market outperforming venues and Unibanco, which are merging head of emerging markets research at Tandem to create Brazil’s largest private Global Partners in New York. ■ sector bank, together surpassed nthe a region renowned for itsof defaulters, Brazil on government and corporate ‘But this is not necessarily a consequence of the market capitalization Bank Market performance, January 1-March Interest abroad has done rather well of late. The country hasn’t debt should have fallen after20, the 2009 investment grade status. On the contrary, I think the of America and Citi combined. formally run out of cash since the 1980s, while upgrades; instead they soared. investment grade status just confirmed something Furthermore, 2008 set a new 140,000 50 others in South America, like Ecuador, are The credit crunch has distorted a thestill market was already pricing in. record for foreign direct investForeigncat direct investment playing and mouse with international investors. lot Brazil of theIndex data, MSCI 130,000 ‘You can see that in the performance of theaccording to Ricardo ment (see Interest abroad, above). in Brazil MSCI EAFE Index This led to Standard & Poor’s, the credit ratings Leoni, capital 40 Brazilian currency since the start of 2009. It’smarkets superin120,000 agency, upgrading Brazil’s foreign debt to investment tendent the Brazilian unit of relatively stable compared with what hasathappened Going strong grade status in April 2008, which commentators Santander, the British Spanish bank. to110,000 other currencies around the world, like the From this evidence it is clear 30 predicted would boost interest in the country’s pound or even the euro. Also, from an investor perBrazil is coming through the 100,000 Comparable strength issuers. Fitch, another ratings agency, followed point ofMarch view,2009 I think everyone gives credit crisis well and remains Jan 2009 attractive Feb ception 2009 But when you compare Brazil’s with its own investment grade rating a month later. 20 to Brazil 90,000 for what it has done in the last 10 years to foreign investors. performance to those of its peers, Two investment ratings meant a wider range in terms of solving its most important problems ‘When you look at day-to-day 80,000 in both developed and emerging of international investors, including some big US related to its balance of payments.’ 10 research from thebe investor markets, it doesn’t look too bad. pension funds, would able toside pour money into 70,000 Of course, nowhere is out of the woods yet. Global and the equity side, it’s clear the During the first months of 2009, the country’s stock market. The ratings also gave markets have mostly stalled or fallen back since the perception of Brazil has changed 0 the MSCI Brazil Index easily outthe country an overall credibility boost on the 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 start of the year; so far, Brazil is one of the exceptions. dramatically,’ comments Evandro performed Index, international stage, prompting Bovespa, Brazil’s Jan 2009 Feb 2009the MSCI EAFE March 2009 Source: www.unctad.org By March, S&P had placed around a quarter of soverPereira, index, head of American a benchmark for non-USSource: stocks benchmark to Latin hit record highs. www.mscibarra.com eign-rated countries on negative outlook. capital markets for UBS Pactual. (see Market performance, opposite). Everyone knows what actually happened next, And Brazil’s banks have But the country is relatively well placed to ride Bigger firms have also enjoyed however: the financial crisis entered its second and managed to keep their heads out the economic downturn, a fact reflected by its the ongoing corporate bond decisive phase. Brazil, like every other country in above water, while many in other ratings upgrades last year. Afterbonanza: all, upgrades are a the state- May 2009 43 Petrobras, the world, saw its stock market collapse. It ended countries have 2008 sunkdown without trace consequence of investment that has already occurred, owned oil giant, issued 10-year 41 percent. or needed emergency resuscitanot a cause of it, notes Paulo Vieira da worth Cunha, a bn in February bonds $1.5 All this means it is pretty tough to gauge the tion. Earlier this year Banco Itaú former bank nowReuters says 2009 in awho saleisthat impact of the investment grade ratings, which – at director at Brazil’s central 042-043 F brazil.indd 43 9/4/09 18: and Unibanco, which merging head of emerging markets research at Tandem was three times oversubscribed. time ofare writing – Brazil maintains. Risk premiums to create Brazil’s largest private Global Partners in New York. ■ sector bank, together surpassed May 2009 the market 42 capitalization of Bank Market performance, January 1-March 20, 2009 of America and Citi combined. Furthermore, 2008 set a new 140,000 record for foreign direct invest042-043 F brazil.indd 42 9/4/09 18:15:29 MSCI Brazil Index 130,000 ment (see Interest abroad, above). $ bn

the Ridingwave

$ bn

I

MSCI EAFE Index

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