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SINGAPORE: Most Singapore-based fund managers are willing to pay a premium to invest in shares of companies with good investor relations, according to a survey by the Singapore Management University and the Investor Relations Professionals Association of Singapore.
However, the survey also found that Singapore firms are still lagging in investor relations when compared to their counterparts in the US and UK.
SingTel, CapitaLand and Singapore Airlines are ranked among the top Singapore-listed firms when it comes to investor relations.
Two-thirds of respondents in the recent survey said they are willing to pay up to 15 per cent more on top of their market value to invest in these firms. An additional 25 per cent said they are willing to pay a premium of more than 15 per cent.
Mark Chong, associate professor, Corporate Communication Practice, Lee Kong Chian School of Business, Singapore Management University, said: "The key finding that we've uncovered from this survey is that investor relations plays an important role in institutional investors' decision to invest in a particular company.
"The other key finding that we've been able to derive from the survey is that institutional investors are willing to pay a quantifiable premium for good investor relations."
However, the study also showed that the level of investor relations here is only rated as average. Some respondents to the survey added that the level of corporate transparency amongst Singapore-listed firms can be improved.
So, industry watchers said companies should devote more resources to help create more business value for their firms. That is likely to help boost a firm's credibility, a quality that respondents value the most.
Joseph Chia, general manager, Investor Relations, Professionals Association (Singapore). Said: "Long-term credibility doesn't mean that they come to you to tell you good news or they come to you only when they need to raise funds. Long-term credibility is established when you actually communicate with investors honestly - whether it is good or bad news."
Mr Chong added: "If they are only communicating when times are good, investors may attach less credibility to statements made when times are bad or when the news is not so pleasant."
The study conducted in April surveyed some 38 fund managers representing 27 institutional investors with equity assets under management in Asia totalling over US$30 billion. - CNA/vm
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