6 Things An Investor Relations Pro Should Know

Investor Relations Professionals are knowledgeable people. But beyond being knowledgeable, they are expected to have a good grasp of the following areas to make an impact on the company they represent and the community they serve:

1.       Understand financial markets

Mr. Munir Gwazo, SEC DG

Financial markets are the hub around which quoted companies revolve; they indicate how well company stocks are doing.

Investor relations pros should have a good knowledge of how markets work. That there is a primary market called Initial Public Offering (IPO) and a secondary Market.

He should know how the market measures whether it is performing well or not by way of the Market Index, called All Share Index (ASI) and how much capital it is warehousing called the total capitalisation. (See the market section of daily newspapers).

He should also get to know the following about his company:

-          Share Price

-          Opening price, Closing Price

-          Price Earnings Ratio

-          Earnings Per Share (EPS)

-          Stock price trends

-           should know about the stock performance of his competition and the sector

2.       Understand financial statements

An investor relations professional should have basic understanding of financial statements such as the Profit and Loss Account (P&L) and the Balance Sheet.

He should know about:

-          Gross earnings/turnover

-          Operating profit

-          EBITDA

-          Pre-tax profit

-          Net profit

-          Performance ratios

3.       Understand economics

The IR man should have some basic understanding of macroeconomics indicators so he can contextualise the performance of his company and his sector/industry.

-          He should learn about inflation (CPI)

-          Interest rates

-          Producers Price Index

-          GDP etc

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4.       Strong investment community contact

The investment community especially investment bankers are the guys who are going to under right and buy up your company shares so its good to have a good relationship with them.

When your company is going to make an offer, at some point, you are going to have to bring them together in a forum (investor forum) to sell your stock and or find a way to give them regular updates about your company.

5.       Know the financial media

The financial media is very crucial for carrying your message beyond a handful of investors and stakeholders. In Nigeria, most daily newspapers have business sections where financial news is carried.

You need to know the nuances of the financial media as there are some that are strictly business newspapers like BusinessDay and those with a 50-50 approach like Independent. Yet there are those where financial news is only a micro part like the Sun Newspaper.

There are a couple of online media that have very strong financial content like Proshare and Nairametrics

6.       Regulatory Filings

There are regulatory filings companies make to the regulators that an investor relations practitioner should be familiar with such as quarterly and annual statements of results filed with the Securities and Exchange Commission (SEC). Companies offering shares for sale would need to file a prospectus