Seven tips for communicating and not falling foul of the ASX
In an environment in which one errant tweet can get you suspended from trading, rules around research reports have experienced significant change and the validity of paid online media coverage is in the spotlight – the last thing a listed company wants to do is fall foul of ASX guidelines.
That was the theme of a well-attended, engaging and at times spirited panel discussion at a joint event run by Cannings Purple and the ASX this week.
Here are seven key takeaways from panellists James Rowe (ASX, WA State Manager), Eddie Rigg (Argonaut Securities Deputy Chairman) and Jamie Wilkinson (Cannings Purple, Director of Design and Digital).
- The ASX will always be watching:
“I’m on hundreds of email lists and I’m getting all these reports and I look at them and think to myself ‘that’s not announced…because I’m doing the announcements and I know that’s not announced.’ By and large, a lot of these things are emailed to me.
“We have a surveillance team in Sydney and they are tracking share prices. As a general rule, if the share price moves we look for an explanation … and there are hundreds of these alerts go off every day. The vast majority are explainable and the company has made an announcement but there are others that aren’t and [so] then there are forums we turn to. The people in the forums are far better than us at knowing what’s in the Twittersphere and they repeat it.” – James Rowe, ASX
- Educate all your employees:
“There’s been an enormous pressure and regulation put on the brokerage firms that are members of the ASX … our own policy on research here at Argonaut is the single biggest policy we’ve got at the firm … it’s 32 pages long. But our problem is that it’s actually the companies who don’t know the rules. The education needs to be on the companies and the people within the companies. And it’s not just the directors and the company secretaries it’s all the people there, because they are passing on a lot more information that shouldn’t be allowed to be provided.” – Eddie Rigg, Argonaut Securities
- Don’t compare apples with oranges:
“The one I find most concerning is peer comparisons … and what we’re trying to deal with are the things that are obviously misleading – when you’ve got an explorer comparing themselves to Rio…those types of extreme examples … or a telco comparing themselves to Telstra on revenue. That’s not a proper comparison. The problem is once we start taking on peer comparisons, every company named in another company’s presentation rings us up and says ‘that’s not a fair comparison’- so we end up running around in circles.”- James Rowe, ASX.
- Carefully pick your communicators:
“If you are going to invest in a strategy for social [media], you have to resource it properly. We often see companies that have office interns and junior people doing their posting, which makes no sense. You wouldn’t put those people out to be interviewed by the ABC … you need someone who knows the company and what its key messages are.” – Jamie Wilkinson, Cannings Purple
- No ‘news’ is YOUR news:
“The overriding view is that there shouldn’t be anything materially new in a research report that the company hasn’t already disclosed. There might be analysis but certainly no new information from the company. If there is no new information, then it’s purely promotional and not disclosing material information and the ASX platform is not designed for release of unnecessary promotion reports. But by all means, do what you want with it on your own platform. There is an absolute place for research on companies, that place just isn’t the ASX platform.”- James Rowe, ASX.
- Take control of your own content (when you can):
“One of the things companies can be doing better, especially in the mining and resources sector, is shooting video and telling their own story on their own channels, rather than relying on third parties, who may have large distribution networks and databases but also want payment to promote your story on there. There’s no reason why individual companies can’t be publishers and create their own audience through good content …. something like 80 per cent of all internet traffic will be video by 2020 so if you aren’t using that you are going to struggle to cut through, regardless of what platform you are using.” – Jamie Wilkinson, Cannings Purple.
- Social media isn’t the only danger zone:
“In the print media we did start to see for a while the rise of paid-for ads in papers and these were clearly written by people who weren’t heavily involved in the resource game but also weren’t aware of the tricks of the trade with the JORC Code. We had quite a number for week on week, having to pull up paid advertorials from the back of the paper. It took a while but then they realised there was a whole reporting regime they had to comply with … so it’s not just social media.”- James Rowe, ASX.
- The ASX will always be watching:
Cannings Purple are industry leaders in Investor Relations, with a focus on helping companies build, grow and raise their profiles. Through our Investor Insight channel, we connect listed companies with brokers, fund managers and investors. Cannings Purple also specialises in social media training and strategy for businesses.
Email Andrew Rowell, Director of Investor relations.
Email Jamie Wilkinson, Director of Design and Digital.