Technology - 08/14/2018


In recent years, new technologies and the growing volume of information have dramatically changed all company departments. This scenario is not any different in investor relations departments. Investors are increasingly demanding more information. Analysts have increasingly dynamic models, including unstructured data, such market sentiment, etc., while executives and board members need increasingly advanced analyses. IR must be focused on selling the company and disseminating its investment message to its stakeholders and the market in general. But how can we organize all this information in a more palatable way?

The amount of information available to the market is enormous and the IR department often does not have the time to organize it in order to help its day-to-day activities. This is where technology comes in to support decision-making:

  • Is the target price of the company’s shares homogeneous among analysts?
  • How is our shareholder base expected to behave in the coming quarters, weeks and days?
  • Does our shareholder base reflect variables such as the company’s sector, strategy and moment?
  • Which investors should my C-level visit in the next roadshow?
  • How can meetings with analysts go beyond the trivial and offer better information?

All this is possible thanks to predictive analysis, which looks into how the market will behave. Only by organizing the information and using the right technology tools can companies provide reader-friendly data. It is in this context that technology can help IR departments be more productive in their day-to-day activities.

How can technology help IR day-to-day activities?

  • Targeting: Targeting can be done through artificial intelligence and machine learning to predict which funds/investors are interested in buying/selling a position in the company.
  • Market Expectations: Expectations and future volatility are always measured by the market. Therefore, having this information before the market can be a great tool for making decisions and even managing the expectations of analysts and investors. This information is extremely valuable for meetings and conference calls.
  • Stock Performance: By using historical calculations, correlation and regression, it is possible to predict the price/volume of a given share. A thorough analysis of the buy and sell orders enables you to see almost in real time how investors are behaving. With this information, the IR team can take specific actions for a given fund/investor.

(Intelligent) information is everything

IR decision-making should be quick, which is why information must be provided swiftly, always based on reliable data. In order to have a competitive edge over the market, the IR team must have real-time data in order to know before the market how its stock is behaving. This way, the IR team can present information that goes beyond the trivial at meetings with investors/analysts.

Intelligent information with data prediction can only be obtained through technology. IR teams need the right tool to answer questions such as Who should invest in our stock? and How will these investors behave?  IR teams that have these answers are a step ahead of their peers.

Having information within reach is crucial. Information is dynamic – there is always something different. Therefore, tracking how investors behave and managing market expectations are essential for good IR.

Cognitive platforms are indispensable tools for effective decision-making in modern IR. The creation of algorithms that facilitate the most basic IR tasks is what brings effective value to the Company. Having technology integrated into day-to-day activities creates value and knowledge. Paradigm-breaking technological IR is already a reality.

Originally published by Marcele Magalhães