GCMA Investor Relations Release

By 08/02/2011

GCMA Investor Relations Release


Roundtable Finds Debt Investor Relations Teams should be more Credit Savvy

  • http://www.gulfbondsukuk.com/templates/ja_ores/images/bullet3.gif); line-height: 19px; overflow: hidden; background-position: 20px 7px; background-repeat: no-repeat no-repeat;”>Post Crisis investors now demand sophisticated information
  • http://www.gulfbondsukuk.com/templates/ja_ores/images/bullet3.gif); line-height: 19px; overflow: hidden; background-position: 20px 7px; background-repeat: no-repeat no-repeat;”>Issuers need to communicate with Bond and Sukuk Investors

Dubai, UAE, February 8th 2011: To attract frontiers of new capital markets, debt issuers in the GCC region need to be prepared to offer sophisticated service to debt investors, a roundtable of debt investor relations professionals in Dubai has concluded.

The Gulf Capital Market Association along with the Middle East Investor Relations Society gathered regional corporate issuers and investors along with regulators, rating agencies and corporate governance experts to discuss a key issue that will influence the direction and growth of the debt capital market in the Gulf region.

The roundtable concluded that in line with the increasing demand from both regional and global equity and debt investors for greater disclosure and transparency, investors require more detailed information and regular communication. In particular the roundtable agreed that debt investors, who used to be passive, are becoming more active and informed. Participants agreed that issuers need to provide roadshows, conferences and management presentations to attract a wider investor base, which will in turn attract diversification and cheaper pricing.

Developing debt focused Investor Relations is crucial in post-crisis emerging markets,” said BNY Mellon’s Peter Gotke, event Co-Moderator and Board member of the Middle East Investor Relations Society. “Debt IR teams in the Gulf region have a bigger role to fill than ever before.” Co-Moderator Diane Faulks of Citi and former Chairman of the UK’s Investor Relations Society added, “as investors have an increasing choice of where and how to invest debt IR is being increasingly recognized as a priority for management.”

The event also discussed the results of the regional fixed income trade association survey on Investor Relations, completed in October 2010 by the GCMA.

The survey found that among issuers, the vast majority believe that equity and bond investors have different information needs and that fixed income investors require more information in times of stress. Most issuers indicated that their IR staff deal with fixed income, but a majority have not dedicated staff to it. GCC issuers were split over whether the knowledge base of gulf investors is at par with or below that of non-GCC investors. Most issuers do not benchmark their IR activity to guidelines or comparable companies.

During the roundtable, Jan-Willem Plantagie, Managing Director of rating agency Standard and Poor’s and member of GCMA’s IR subcommittee, said that investors are approaching rating agencies more, and that detailed information and analysis is becoming increasingly standard behind all investment decisions. Plantagie also stated that Investors feel they also have a duty to inform themselves.

Participants discussed how global companies provided good debt IR and commonly agreed that in addition to management ‘buy in’, the convergence of certain elements of Debt & Equity IR can be useful for investors, such as debt IR teams joining equity teams on roadshows. The GCMA survey revealed that most debt investors had met issuers on roadshows, but a number were not satisfied with the quality and quantity of information provided.

The roundtable also identified that Governments and Government Related Entities (GREs) are a powerful driver for IR development in the region and should play a leading role. GCMA IR subcommittee co-chairman and BNY Mellon Corporate Trust MENA Business Manager, Giambattista Atzeni, stated “Progress in debt IR as a whole has been made and certain GREs have set important benchmarks in this space, however as interest in the Gulf region increases, the bar needs to be raised.

The full results of the survey have been shared with survey participants and GCMA members. The survey and roundtable are steps in a process leading to publication of debt investor relations best practices that will set the standard for regional companies.

The full conclusions of the roundtable will be contained as part of a consultative draft publication of Debt IR best practices for the region. Roundtable participants will be acknowledged as contributors to “Debt Investor Relations, Best Practices for Gulf Issuers.



About The Gulf Capital Market Association

The Gulf Capital Market Association (GBSA) is the regional trade association representing the Arabian Gulf fixed income market. GCMA harnesses the commitment of its stakeholders to promote a wide and deep market on the basis of international best practices.

About the Middle East Investor Relations Society

The Middle East Investor Relations Society is an independent, not-for-profit organization with membership open to all IR, financial communications, and capital markets professionals throughout the Middle East region.