IROs negative on short selling - BNY Mellon survey
25 October 2011 New York
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Some 64 per cent of investor relations offices (IROs) within companies globally think short selling has a negative impact on the trading environment, according to a recent BNY Mellon survey.
In terms of equity trading, short selling is perceived to have a negative impact across the globe by 50 per cent of companies worldwide and 32 per cent believe that hedge funds adversely affect the markets.
Developed as a benchmarking tool for BNY Mellon’s depositary receipt clients, the survey, Global Trends in Investor Relations, looks at how publicly traded companies are managing their investor relations practices and features input from 650 companies across 53 countries. Respondents cover the range of market cap and sectors, including financials, industrials, consumer, technology and healthcare.
The most vocal IROs who have a negative view of short selling on equity trading are in North America. Although fewer IROs in EEMEA, at 42 per cent, and Western Europea, at 45 per cent, share the same view, they are still critical while IR executives in frontier markets are less concerned, at 31 per cent.
A significant portion of IROs also have “definitive opinions” on the issue of regulatory oversight over short selling, at 57 per cent of respondents, even when they indicated the practice does not have a negative impact on markets.
In terms of regional breakdown, North America is where the highest number of IROs think there should be more regulatory oversight, followed by Asia Pacific, Western Europe and Latin America.
On a market cap basis, a considerable majority of micro cap IROs, at 67 per cent, would like to see regulations placed on short selling.
At the same time, hedge funds remain an integral component of global IR activities with around 92 per cent of companies worldwide meeting with hedge funds, yet the percentage of a firm’s meetings devoted to hedge funds (21 per cent) has declined slightly since 2010 (24 per cent) but remains above 2009 levels (16 per cent). Micro caps devote less time to meetings with hedge funds, at 12 per cent.
In terms of equity trading, short selling is perceived to have a negative impact across the globe by 50 per cent of companies worldwide and 32 per cent believe that hedge funds adversely affect the markets.
Developed as a benchmarking tool for BNY Mellon’s depositary receipt clients, the survey, Global Trends in Investor Relations, looks at how publicly traded companies are managing their investor relations practices and features input from 650 companies across 53 countries. Respondents cover the range of market cap and sectors, including financials, industrials, consumer, technology and healthcare.
The most vocal IROs who have a negative view of short selling on equity trading are in North America. Although fewer IROs in EEMEA, at 42 per cent, and Western Europea, at 45 per cent, share the same view, they are still critical while IR executives in frontier markets are less concerned, at 31 per cent.
A significant portion of IROs also have “definitive opinions” on the issue of regulatory oversight over short selling, at 57 per cent of respondents, even when they indicated the practice does not have a negative impact on markets.
In terms of regional breakdown, North America is where the highest number of IROs think there should be more regulatory oversight, followed by Asia Pacific, Western Europe and Latin America.
On a market cap basis, a considerable majority of micro cap IROs, at 67 per cent, would like to see regulations placed on short selling.
At the same time, hedge funds remain an integral component of global IR activities with around 92 per cent of companies worldwide meeting with hedge funds, yet the percentage of a firm’s meetings devoted to hedge funds (21 per cent) has declined slightly since 2010 (24 per cent) but remains above 2009 levels (16 per cent). Micro caps devote less time to meetings with hedge funds, at 12 per cent.
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