Building Stronger Links with Offshore Investors
This article appeared in the December 2011 edition of the Listed @ ASX newsletter.
Cerro Resources Chief Executive Tony McDonald gives a first-hand view on how ASX Small and Mid-Cap conferences help emerging Australian listed companies.
Cerro Resources chief executive Tony McDonald was pleased with his company’s participation in the ASX Small to Mid-Cap conference in Hong Kong in October. “I thought I did well talking to 11 institutions and private investors in one-on-one meetings in a day. But another Australian miner told me they got through 14 investor meetings in a day! It was a terrific opportunity to talk to so many offshore investors, and having the meetings organised by ASX certainly helped.”
• You can learn more about ASX Small and Mid-Cap conferences here. The next ones are in New York and London in early March.
Cerro Resources, a fast-growing explorer with gold and silver assets in Mexico and iron ore in Queensland, was one of 16 companies that participated in ASX’s Hong Kong and Singapore roadshows. ASX Small to Mid-Cap conferences help ASX-listed companies promote themselves to international investors and build relationships with different investor groups. The events are an important part of ASX’s broader strategy to better meet the needs of companies outside the S&P/ASX 200 index, and provide more investor relations support in Australia and offshore.
Presentations are posted on the ASX website and promoted to retail investors through the ASX Investor Update newsletter, which is distributed each month to more than 180,000 investors. You can download presentations from the recent Hong Kong and Singapore conferences here.
Filling a gap
Participating companies in the Small and Mid-Cap conferences typically have a market capitalisation of between $150 million and $2 billion. Some may be too small to attract the attention of offshore fund managers that invest mostly in larger companies, or they may not have an Australian sharebroking firm that organises overseas investor roadshows for them. As such, ASX fills a gap in the market by linking emerging Australian listed companies with offshore investors through the conferences.
Attracting foreign investors can be an important milestone in the development of small and mid-cap companies. Such capital can help Australian companies grow, bring new investors to a company’s share register and provide more stability in shareholdings. It can also make small and mid-cap companies more liquid, benefiting investors, financial intermediaries and the market generally.
ASX promotes each event to offshore investors, pre-screens investor enquiries to ensure only genuine investors meet Australian companies, and organises the meeting schedule. Typically, up to 20 companies make presentations to an audience on one day, followed by several one-on-one meetings with investors. The Hong Kong and Singapore roadshows can attract more than 150 delegates.
Cerro’s Tony McDonald says the Small and Mid-Cap conference is a productive way for emerging ASX-listed companies to meet offshore investors. “I would never presume you can go to these markets once, tell your story, and it’s all done,” he says. “It is a long-term process about building familiarisation and recognition of your company in offshore markets. That said, Cerro received some good investor enquiries and leads out the conferences, and more people wanting to receive our announcements and hear about our progress.”
McDonald liked the conference format. “In Hong Kong I had appointments from 6.30am to 7.30pm, and saw institutions, sharebrokers, and private investors who wanted an update on Cerro. I found the conference a very convenient, compact way to meet investors; and just as efficient for investors, who get to hear about lots of promising Australian companies in the one day. I like that ASX pre-screens the meetings: you know you are meeting the right people and that nobody is trying to sell you anything. It is a well-organised event.”
McDonald says the ASX brand is important. “Going to Asia under the ASX banner brings a wonderful level of credibility when you are an emerging company,” he says. “It makes it an easier introduction to Asian investors. Every company is different, but my general advice to others who go on this event is to be well prepared, take nothing for granted, and be prepared to build long-term relationships with offshore investors. And, of course, be ready for a very busy day.”
Information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice from an Australian financial services licensee before making any financial decisions. Although ASX Limited ABN 98 008 624 691 and its related bodies corporate (‘ASX’) has made every effort to ensure the accuracy of the information as at the date of publication, ASX does not give any warranty or representation as to the accuracy, reliability or completeness of the information. To the extent permitted by law, ASX and its employees, officers and contractors shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided or omitted or from any one acting or refraining to act in reliance on this information. This document is not a substitute for the Operating Rules of the relevant ASX entity and in the case of any inconsistency, the Operating Rules prevail.
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© 2013 ASX Limited ABN 98 008 624 691