This presentation is by MSLGROUP thought leader Jaideep Shergill, head of our financial communications in Asia and CEO, Hanmer MSL. Hanmer MSL is one of India’s largest multi-discipline communications firms and a leader in the area of speciality communications services, including strategic public relations, financial communications, social media, events, activation and creative services. It is part of MSLGROUP, Publicis Groupe's flagship strategic communications and engagement network. This presentation offers an in-depth understanding of financial communications and investor relations.

1. AN UNDERSTANDING
OF
FINANCIAL COMMUNICATIONS &
INVESTOR RELATIONS
BY JAIDEEP SHERGILL
CEO & HEAD FINANCIAL COMMUNICATIONS ASIA
Feb 2012
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2. INDEX
 Financial Communications – An Understanding
 Asia Offering
 PR for Financial Firms- Listed Corporates, IPO & M&A, BFSI
 Investor Relations
 Your Role In Financial Communication
 Case Studies
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3. FINANCIAL COMMUNICATIONS -
INTRODUCTION
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4. Financial Communications – An Understanding
Financial
Communication
PR - Financial PR – Listed PR – Financial
Firms Corporates Deals
Banks Corporate Earnings Equity Capital Markets
Insurance Corporate Governance IPO/ FPO/Rights
Mutual Funds Statutory Compliance Debt Capital Markets
Non Banking Financial Disclosure Policy NCD/FCD/Bonds
Companies Transaction
Investor Relations
Broking Firms Communications-M&A
©2011

5. Financial communications- Asia Offering
Transaction Communications Investor Relations /
Corporate Communications Disclosure
and Positioning
• M&A – friendly and
• Integrated programs, including: contested, international and • IPOs and other listings
• Media relations domestic • Complex disclosures
• Thought leadership programs • Divestitures / spinoffs • Quarterly and annual reporting
• Investor relations • Recapitalizations • Roadshow presentations
• Internal programs • Post-acquisition / integration • Financial community
• Government affairs programs intelligence
• IPOs & other listings • Investor targeting
Private Equity / Hedge Special Situations and
Funds Corporate Governance Crisis Communications
• Proxy contests • Crisis communications
• Strategic positioning for
• Shareholder activism • Litigation support
alternative investment firms
• CEO succession planning • Regulatory matters
• Media relations
• Board accountability • Bankruptcies / restructurings
• Transaction support
• Portfolio company support • Investigations
• Senior Executive changes
• Product recalls
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6. PR FOR FINANCIAL FIRMS
CORPORATES / IPO & M&A/ BFSI
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7. PR For Financial Firms – How It Is Different
Requires in-depth understanding of the Company, its Business and the environment
it operates in
Differentiated Audiences require specialized information
Customers are investors and not consumers
Regulated business environment (Regulatory/Government Bodies)
Regular update of information required with continuous changing Business
environment
Financial crisis & Scams- Create a turbulent market of uncertainty (Impacts the
company‟s overall Growth Story & Fund Raising capabilities)
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8. Telling a Financial Story To The Stakeholders Who Will Validate It
- Listed Corporates
How can the stakeholders validate the financial information?
Analysis
• Financial statements & Results How is it possible?
• Management forecast
• Key performance indicators
Supply of Financial
Information
Timely…Qualitative…Adequate…Reliable…Accurate…Indicative
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9. PR For Financial Firms – How It Is Different?
Mutual Funds & Equity Traded Funds
 Understanding of Regulatory & Communication Guidelines differs
from each country.
 Philosophy of Fund Managers and Mutual Fund Companies.
 Value Investor : Looks for stocks with potential long term growth
 Growth Investing- Buy low and sell high
 Blend investing – Is a combination of the above two
 Aggressive growth Investing – High Risk, High return
 Momentum Investing – Catch a good script and ride the wave to exist with a medium to good return
 Peer Group & Media trends mapping & products – Its about building
the brand.
 ETF are the next big funds as they are investing in Gold and give
excellent return
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10. Transaction Communications- IPO & M&A
 Need timely communication at the time of deal.
 Knowledge of regulation governing an IPO or M&A is important and is regulated by
securities regulator, the China Securities Regulatory Commission (CSRC).
 Communication needs to be in line with regulators and approved by lawyers as is a
practice all over the world ie IPO listing on LSE or in China
 Fresh issue of equity / debt requires communications to attract investors – we
need to tell a story on why we are raising funds, growth of industry and our plans
in order to make the story attractive
 Mergers & Acquisitions, Price - Earnings, Venture Capital deals need planned &
strategic communications
 Valuation of the business & company is the key communication here
In Touch : Investment Bankers, Corporate Lawyers, Corporates who are
your clients, Consultant Firms; i.e. Ernst &
Young, PWC, KPMG, Deloitte Touche Tohmatsu , Boston Consulting Group.
Every Region will have top 4 names.
©2011

11. Communication for BFSI Sector
Banking & Financial
Services Insurance
Business Segmentation
Commercial Banks: Life & General
 Government
Banks
 Private Banks
 MNC Banks  Insurance
 Capital Market Banking Advisory
 Wealth Management  Underwriting
 FOREX Management  Re-insurance
 Asset Management
 Retail Banking
 Hedge Fund Management
 Institutional Banking
 Investment Banking  Stock Broking –
Intermediary
 Private Equity Funds
 Venture Capital Funds
 Angel Investment
 Financial Litigation
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12. Communication Imperatives
Key Triggers for Communication Needs for BFSI:
 Fast growing sector – Reach beyond urban markets, semi-urban & rural as well
 Expanded service basket amid fierce competition
 Product & services differentiation – Key positioning required
 Geographical challenges – product & service distribution
 Mass-scale consumer orientation required on real-time basis
 Growing dependence on facilitators including communication counsel
 Complex compliance requirements & adherence to regulatory framework
Communication Areas
Need to leverage these areas
 New products, services & geographical expansion
 Product distribution
 Product innovation
 Operational flexibility – Peer comparison
 Infrastructure capabilities
 Financial reporting & regulatory compliance – Assets/Liabilities Quality, Governance, etc
Communication: Strengthening Business Relationships & Quality of Services
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13. INVESTOR RELATIONS
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14. Why Do Corporates Need Investor Relations?
Investor relations (IR) is a set of activities which relate to the ways in which a company
discloses information required for regulatory compliance and good investment judgment to
bond and/or shareholders and the wider financial markets.
 To appropriately convey performance to shareholders &
keep co-owners informed
 To support corporate positioning
 Clear communication helps to secure fair valuation &
market company‟s stock
 To build corporate reputation, trust and credibility
 To create information level playing field
 To unlock Value
 Good corporate citizenship
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15. What Does It Consists Of?
INVESTOR
RELATIONS
Securities Communica
Law tions
Compliance
Finance Marketing
Investor Relations enables the most effective two-way communication between a
company, the financial community and other constituencies, which ultimately contribute
to a company's securities achieving fair valuation.
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16. Components Of Investor Relations
 Consistent proactive communication
 Quarterly result updates / press release
 Important corporate developments
 Choice of appropriate outreach tool
 Analyst meet Vs conference call
 Facility visit
 One-to-one meetings
 Regular feedback
 Constant touch with investing community
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17. Important Criteria For Investor Relations
 Consistency & transparency of Investor Relations
 Understanding of Markets & Valuation
 Business knowledge / insights from team
 Quality of one-on-one meetings / conferences
 Quality of service from Investor Relations team
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18. Business Knowledge / Insights From IR Team
 Understand the Company, Industry
 Products and Services you bring to the Market
 Markets you compete in
 Demand drivers, market opportunity
 Growth characteristics, operating metrics, segment profitability
 Keep track of latest developments in the Company
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19. Activities Under Investor Relations
Concalls
One-on-One Meeting It is essential to communicate the investor
Most analysts prefer having a direct community during quarter/annual results of
update from the company‟s top the company. Through this, the company can
management. This helps them to address the current and future plans and
understand the company better and can achievements of the company. It is the most
also come up with research reports. preferred mode as it is economical, easy to
access and can be reached to a large number
of people in a short time frame.
Bridge-Building Meeting Analyst Meeting
It is advisable to conduct these meetings as it Through this, the management of the
provides an opportunity to introduce your company can interact with the entire
company to various financial institutions and research analyst community in a span of
advisories. This also helps in establishing three hours. However, it is always
strong relationships with the target groups. advisable to conduct these meetings
once a year as the costing for these
meetings is generally high.
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20. Quarterly Result Planning
Preferably Early Within 15 minutes
in the day of conclusion on
board meeting
Audit Comm. Intimation to Uploading results
Meeting stock exchanges on the website
Board Meeting
before 12 noon Media Briefing Analyst
Briefing
One-to-one Select briefing Concall Analyst
meet
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21. OUR AUDIENCE
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22. Target Audience
 Sell-side Analysts : Analysts who sells equity ideas mainly from
Stock Broking Houses & Investment Banks
 Buy-side Analysts: Analysts who supports fund managers from
Various Funds; PEs, Etc..
 Fund Managers: manages different portfolios of funds
 Portfolio Managers: individual portfolio managers mainly
provides by PCG/HNI segments of broking houses and
investment banks.
 Financial Media : media reporting about financial performances
and businesses.
©2011

23. Sell-Side Analysts - Motivation
 Sector specialists with Institutions like Asset Management companies
 Research prominent companies within the sector with an objective to
make a recommendations
 Recommendations could be – Buy, Sell, Hold, Outperform, under-
perform, market performer, overweight, underweight
 Motivation is to identify stocks which have potential to go up further
 Essentially a cost centre, exist to generate higher broking income
©2011

24. Dealing With Sell-Side Analysts
Our Objective
 Help them make correct assessment about revenue and profitability
 Create consensus about strategy and future outlook
 Gain positive endorsement
 Receive feedback
How do we deal with them?
 Educate about the sector
 Educate about the company
 Help them make correct assumptions
 Remove wrong notions
 Continuous update
 Do not provide opinion on their projected numbers
©2011

25. How Do They Work?
 Spend lot of time with the company
 Understand growth triggers and value drivers
 Make assumptions
 Ultimately interested in projecting EPS for the next two years (Net Income
– Dividends divided by Average outstanding shares)
 Use different valuations techniques and justify recommendation
Finally what matters….?
 All the sell-side analysts have positive recommendations
 No major discrepancies in their estimates, recommendations
©2011

26. Some Of The Top Institutions In APAC Region
Today‟s financial marketplace is dominated by institutional investors, particularly
the new breed of professional investor represented by hedge funds (proprietary
investment partnerships). Consequently, increasing institutional ownership can be
one of the most important catalysts to sustainable share price appreciation.
©2011

27. Summary Of Attributes Valued By Investors
Valued by
Steps we can take
Media/Investors/Analysts
Better qualitative and quantitative disclosure
Transparency
standards in Annual Reports / Financial Statements
Timeliness of Be the first one to deliver the news “Good” or
Communication “Bad”
Frequency of Regular Analyst Meets / Conference calls post
Communication results announcements.
Management Credibility Create track record of corporate governance
Articulate your differentiation vis- a- vis local and
Strategy
global competition
Encourage research analysts to print research on
Availability of research
the company.
Don‟t prepare perfect answers. Perfect answers
Ability to face “What if” may not be the right answer.
questions Demonstrate awareness and willingness to deal
with the situation
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28. YOUR ROLE
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29. Establishing Financial Communication Processes
Establishing calendar of events
Identifying spokespersons for different constituencies i.e. media, analysts, fund managers
Work on key messages
Establishing Standard Operating Procedures (SOP)
Create a mechanism for responding to media & investor queries
Keeping messaging consistent over time and across spokespersons
Establishing a Disclosure Policy
Create mailing list of buy-side and sell-side analysts
Enhancing / updating corporate website for better investor interface
©2011

30. Quality Of Service expected from
Financial Communication Team
 Domain Knowledge ie. Banking, Non Banking, Insurance, Mutual Funds,
Equity Markets/ Financial Markets & listed companies and their sector
ie Steel, Wind Energy, Power etc
 Investor Relations function must demonstrate integrity, leadership and
ownership
 Be Accessible and provide access to Management based on knowledge
 Place a high priority on response time
 Anticipate issues, be prepared to respond to current events
 Keep expectations balanced
©2011

31. Key To Success In Financial Communication
 Your Commitment & involvement – Be see as an advisor
 Consistent and credible - communications
 Clearly articulated, credible business strategies
 Open discussion of financial results / expectations
 Regular contact with client & financial community ie.
Investment Bankers, Research Analyst, Influencers, Brokers.
©2011

32. Cases - Highlight
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33. Seoul International Financial Hub
 Service Period: March 2009 ~ December 2010
 Client: Seoul Metropolitan Government (Invest Promotion Division)
 Objective: To position the City of Seoul as Asia‟s next Financial Center and
help increase investment attractiveness of its financial industry among
international investors
 Activities:
The Banker (2009)
– Established new English information kits and distributed to financial leaders
and professionals (direct marketing)
– Produced creative promotional video, which shown at international
conferences/roadshows
– Uploaded the video clip on YouTube and created linked banner ads at
FT.com, WSJ.com, Economist.com and BBC.co.uk
– Created and sent E-Newsletter „Seoul Finance Premium
Quarterly‟, including vision of SFC, contribution of a foreign CEO in
Seoul, to 500 local & overseas financiers
– Arranged speaking opportunities at large financial seminars to secure
opportunities for on-site promotion of Seoul City
– Co-planned and provided on-site support for Seoul‟s overseas investment
roadshows held in Hong Kong, Singapore, and London
– Generated positive coverage on SIFC both in domestic/international media
 Results:
− Seoul ranked the world‟s 16th most competitive financial city by the 9th
Global Financial Centres Index
− Promotional video clip won Grand Prize at Korea Digital Media Award and
Gold Winner at 2010/2011 International MERCURY Awards
- Awarded the Gold Prize in PR Awards hosted by Korea Association of
Advertising & Public Relations
©2011

34. Citigroup Global Markets Korea Securities
(CGMK)
 Service Period: Feb 2008 ~ Mar 2010
 Client: Citigroup Global Markets Korea Securities
 Objectives: Build CGMK‟s corporate profile as a leading player in
the Korean ELW and structured financial products market
 Activities
- Media campaign for CGMK‟s ELW business launch in Korea
- Strategic media relationship programs, including roundtable
<Feature article> “CGMK Enters into
Domestic ELW Market”
and educational workshop
22 Feb 2008, Maeil Business Newspaper - Speaking opportunity arrangement in industry-relevant
conference
- Publicity – by-lined articles, press releases, interviews
 Results
- Helped the company‟s successful news business launch and
settlement in Korea through well-organized publicity
initiatives and promotional activities targeting investors
<Interview> “You should be prepared in
order to invest in ELWs with high leverage”
<Contributed Column> "Take advantage 20 Mar 2009, Maeil Business Newspaper
of derivatives as investment option”
19 Apr 2010, Hankyung Business
©2011

35. Western Union Money Transfer®
Strategy & Implementation
 Strategy for rural India to educate the masses as well as
increasing recall for the brand Western Union Money
Transfer® through road shows, support for local events,
community development initiatives, etc
 Constant media updates on new alliances of Western Union
that contributed to increasing network of Agent Locations
 Created local marketing activities supported by localized PR
in rural markets for different states:
 Rural Olympics in Punjab
 Ajmet Urs – Rajasthan
 Deva Shariff – Lucknow
 Support for Tibet settlements, among others…
©2011
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36. Bharati AXA Life Insurance
Our Mandate
 Highlight the synergies between Bharti & Axa and thereby build a
strong platform for the launch of the Company
 Popularize Bharti Axa Life Insurance‟s corporate launch campaigns
 Position Bharti Axa Life Insurance as “A revolutionary in the life
insurance space”
 Project their spokespeople as industry thought leaders
Situation
 Presence of a dominant public sector player… “LIC”
 Media clutter (in terms of brand messaging)
 Maintain a respectable „Share of Voice‟ in category media spends
and industry stories…(Especially being a new entrant in the market)
Strategy
 Promote Bharti Axa Life‟s dignitaries
 Establish MD&CEO as a thought leader in the Insurance space
 Develop the second rung of spokes people from the senior
management team as corporate spokespeople
 Adopt senior journalists to establish Bharti Axa Life in the market as
one of the leading private insurance player in the nation
 Increase Bharti Axa Life‟s visibility in Tier II &III cities
 Initiate Non Media Activities
©2011
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37. Piramal – Vodafone Deal
Program
Highlighting the importance of the deal
and showcasing the entrepreneurial
mindset of Mr. Ajay Piramal among the
stakeholders. To provide a humungous
Business platform considering the size of the deals
Standard which was split in two separate tranches.
CNBC TV18
Key Challenges
 Handling the entirety of the deal and
Hindu strategizing it in two separate events
Business
Line
 Building a sustained interest from the
media as well as the shareholders
towards the second part of the deal
The  Creating a stronger content than the first
Economic Financial part of the deal in order to keep the
Times Express importance of the deal
ET Now
Results
 An overwhelming response with a
positive outlook by the media
 Wires, Publications, Electronic
Channels lining-up to grab the first-cut
on the deal
 Every known business media house
carried the coverage extensively
DNA  Acknowledgements on the strategic
Mint move by Mr. Piramal poured in from
Money
various financial experts
©2011

38. Fortis Healthcare – Fortis International Deal
Program
Furthering to Fortis Healthcare‟s
acquisition spree rumors, it was essential
to attract the key media to cover the
news exclusively. Known for their
entrepreneurial successes, the promoters
had to be brought in the fore front of the
media to address the stakeholders on the
positive developments surrounding the
deal.
Hindu Key Challenges
Financial
The Business  Rumors about a negative deal making
Express rounds among the media
Economic Hindustan Line
 The Singh Brothers reluctance to
Times Times address the media
Results
 Exclusive interactions covered by
Reuters and other key Financials in
India
 News covered across Mainlines, Wires,
Financials, Electronic Channels,
Regional Media etc.
 Wide spread response from across the
Business shareholders and Financial Community
Indian
Standard Express
©2011

39. Binani Industries – 3B Deal
Program
Sensitize Binani‟s 3B – The Fiberglass
Company acquisition by projecting the same
on an international arena. Leverage the
acquisition to foster Binani Industries‟
positioning in the corporate league.
Generate sound bytes to the news and
project the Group as a global conglomerate
The in offing.
Economic
Key Challenges
Times
 A pre-cursor news was already in the
Kerala public domain
Bhushanam  Attracting international media to the news
in European markets
 Building a strong content to make the
announcement newsworthy for national &
international media
Business  Execution of the news considering the
Bhaskar different time-zones across the globe
Hindu
Business Results
Line
 Countering the odd time of the release
 Activation of media interest on a larger
scale at odd hours – 10 biggest
publications of India responding positively
Business
 Break-through in TOI, ET, BS, HBL, DNA as
Standard
lead news
 News covered by all Electronic Channels
during Prime Time
 Journalists queuing up with ‘interactions’
requests
Financial Times of  News covered by all Mainlines, Financials,
Chronicle India Regional, Electronic Channels, Wires
nationally and internationally
©2011

40. National Highway Authority of India
Program
Hanmer MSL was given the mandate to
create awareness among retail and
The Hindu institutional investors about the 1000 cr.
Business Line public issue of Tax Free Secured
The Economic
Times
Redeemable Non Convertible Bonds in
Kolkata and Bengaluru.
Key Challenges
 Volatile market conditions
The Times of  Very short notice to the media and
India broking houses to attend the conference
The Financial Results
Express
• All leading media houses in print,
electronic, wires and onlines including
The Economic Times, Business Standard,
Deccan Herald Hindustan Times, Dainik Jagaran, Vijay
Karnataka, Bloomberg, PTI etc. attended
the conferences across Bangalore and
Kolkata
• The Economic Times carried the news
about the NHAI issue as a banner
headline in all its editions across the
country, highlighting the high – quality of
Business Standard media relations that HANMER MSL
Dainik Jagaran
possesses
• The bonds issue was oversubscribed three
times
©2011

41. Muthoot Finance
Program
Hanmer MSL was given the mandate to create
awareness about the 600 cr. public issue of
The Economic Times secured, redeemable, non-convertible debentures
(“NCDs”) to open on December 22, 2011 across 10
cities
Key Challenges
ET NOW
 Volatile market conditions
 Very short notice for the media to attend the
Business Standard- conference
Smart Investor
Divya  Story featured in certain publications and
Bhaskar websites much ahead of the conference
Results
Hindustan
 All leading media houses in print, electronic,
wires and onlines including The Economic Times,
Business Standard, Hindustan Times, ET NOW,
NDTV Profit Dainik Jagran, Malayala Manorama, etc
attended the conference and covered the news
The Hindu in all ten cities .
Business Line  Press release disseminated in Tier II towns
Malayala Manorama received coverage in most leading publication
 Most Publication mentioned the NCD issue as a
profitable investible option
©2011
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42. ©2011