Systemic market and political risk, followed by the uncertainty of new financial regulation, are the top issues named by companies as impacting global market confidence, according to a BNY Mellon survey.
The annual investor relations survey polled nearly 700 companies globally across all industries and found that roughly 75% view systemic risk, political risk, and levels of government regulation as important issues affecting market confidence. In contrast, last year’s survey found that Eurozone issues were the top concern for companies globally, but they remain the greatest concern for firms based in Western Europe, followed by political risk. For Latin American companies, though, government regulation is their top concern.
The purpose of the survey, says Guy Gresham, head of the IR advisory team for BNY Mellon’s Depositary Receipts business, is to “help companies benchmark what they’re currently doing in the marketplace with their global peers. If you’re an emerging market company you can get a better appreciation for what developed market companies are doing. Emerging markets are very important for the depositary receipt space as well.”
The survey also found that expanding shareholder bases internationally continues to be a growing trend, as 45% of respondents said it was a prime goal, up from just 17% in 2010. Western Europe leads this trend with 59% of companies reporting international diversification of investors as their main priority, with emerging Asia and the Middle East close behind (54% and 53%, respectively). Energy companies are the most active in targeting investors outside their home markets (58%) and consumer staples the least (37%).
“Global markets are showing resilience, albeit with significant differentiation between regions,” says Christopher M. Kearns, CEO of BNY Mellon’s Depositary Receipts business. “Looking ahead, investors continue to be wary about the effects of systemic risk, politics and regulation on the world’s markets and how they’ll perform. In response to these challenges, we’re seeing more firms seeking to boost their international shareholders and diversify their investor base. Depositary receipts remain a crucial tool for companies in both traditional and emerging markets to source new pools of capital.”
Systemic and Political Risks Are Top Global Concerns, Finds Investor Relations Survey
Systemic market and political risk, followed by the uncertainty of new financial regulation, are the top issues named by companies as impacting global market confidence, according to a BNY Mellon survey.
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