What can the ASX 100 do better to keep investors happy? Ft. MarketMeter

In today’s investment landscape, where investors have access to a multitude of opportunities and information at their fingertips, the ASX 100, representing Australia’s top-tier companies, face a pivotal challenge: how can they not only engage investors but understand how to keep them happy?

With such large and diverse shareholder bases, these companies can often struggle to effectively communicate with thousands (sometimes hundred of thousands) of investors.

Diolog’s CEO Amy Benson sat down with Nick Coles, Managing Director of MarketMeter, to find out the current trends in shareholder sentiment, what investors actually care about and where companies might fall short.

Here are the four most important factors you should consider when developing your investor relations strategy to keep investors happy, according to the sentiment data:

1. Consistency goes a long way

According to MarketMeter’s data, companies “need to be more proactive in meeting with investors more regularly, to be more visible and available.” This consistent market communication signals to investors that the company prioritises their interests and concerns. 

Proactive investor relations might include seeking out what investors care about, consistency being just one factor, however these factors will differ for each company and their respective shareholder base. 

Proactive engagement and the idea of ‘being more available’ may also include welcoming investor queries and providing accessible ways for them to get a response, whether that be easy meeting scheduling, using Diolog as a response management tool, or making it clear where investors can go for information. 

2. Let’s be clear about transparency 

Transparency can sometimes be viewed unfavourably by company executives, who may perceive it as an onerous or bothersome task to share information with investors. Nevertheless, transparency isn't necessarily about flooding investors with data; instead, it involves understanding what investors actually want to understand and customising communication accordingly. 

“Judging from the scores for how important each category is to investors, the most important aspect of investor relations is transparency, followed by access to the CEO/CFO” (MarketMeter).

With only 10% of Australian investors having a ‘great deal’ of confidence in ASX listed companies (Australian Investor Confidence Survey CAANZ 2023), prioritising methods of transparency in your investor relations strategy could be key for attracting and retaining investors. 

Simply letting investors know you are listening to them by providing accessible ways to engage with the company can significantly increase the perception of transparency in the investors mind. 

Another important factor to consider when keeping investors happy is “the quality of the investor relations service, which would incorporate things like responsiveness, availability of accurate information and trust” (MarketMeter). Transparency and trust go hand-in-hand, after all, how can you trust someone that you can see or hear from?

3. Democratise investor language 

Over the past few years, companies have increasingly grappled with and sought to improve their communication on the topic of ESG (Environmental, Social, and Governance) issues. Interestingly, “ASX 100 companies rank the lowest for Effectiveness of Board, Climate Risk Management, Social Licence, Remuneration Policy & Culture & Conduct – noticeably all ESG categories” (MarketMeter). 

Communicating ESG effectively in a way investors are satisfied with presents a challenge, as it requires greater explanation in language easily understood, especially for the majority of investors who may not want to sift through lengthy announcements exceeding 50 pages. ASX regulations further complicate this task by imposing restrictions on what can and cannot be published.

It's important to note that using more accessible language and delivery of information can lead to more engaged investor behaviour. For instance, considering that a majority of investors now purchase shares using mobile devices, companies should present information in a format that is easily digestible and aligns with existing digital user behaviours.

4. The most valuable qualitative metric: Sentiment

Understanding exactly how investors, one of the most important stakeholder groups, perceive your company is incredibly important for understanding impacts on share price. 

“Understanding where retail and institutional sentiment align and diverge creates invaluable insights for companies as they look to engage investors and communicate their strategic initiatives” (MarketMeter).

According to MarketMeter’s recent data, the top 5 most improved companies from the ASX 100 were (1) Macquarie Group Ltd, (2) Worley Ltd, (3) Nine Entertainment Co. Holdings Ltd, (4) National Australia Bank Ltd and (5) Wisetech Global Ltd. You can bet we are adding these companies to our Diolog app!

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This article was brought to you by Diolog and MarketMeter. Diolog is a two-way retail investor communication software which empowers companies to scale two-way communication to build trust, increase confidence and facilitate greater engagement with shareholders. MarketMeter provides interactive institutional investor sentiment insights on ASX-listed companies through its online analytics platform.