MTS bags top IR award
Oct 29, 2009
Delegates gather in Moscow for Russian IR conference and awards
Investor relations in Russia can be tough. The country’s stock market is still in its infancy and remains far more volatile than other major country’s bourses. One consistent performer amid these conditions is Mobile TeleSystems (MTS), which this week picked up another award for its IR department.
The mobile phone operator won the grand prix for best overall IR at the IR magazine Russia & CIS awards in Moscow on Tuesday. Joshua Tulgan, the company’s director of IR, was present to accept the award. With this prize, MTS builds on its success last year, when it picked up best IR by a Russian company at the IR Magazine Continental Europe Awards.
The awards were held at Moscow’s Renaissance Hotel, and were preceded during the day by an IR conference attended by around 100 delegates, including CFOs, IROs, vendors and capital markets experts.
At the conference, Tulgan took part in a panel discussion on investor expectations, during which he talked about the difficulties of doing IR in Russia. For example, MTS saw its share price fall 10 percent in August 2008 following the outbreak of war between Georgia and Russia. ‘Not a lot of IR specialists have to work under these conditions,’ Tulgan told delegates.
The broader problem, for Tulgan, is that Russian companies are viewed as risky, regardless of their fundamentals. As a result, MTS launched an IR blog this year to interact directly with investors and other stakeholders. ‘We are testing other media channels,’ Tulgan explained. ‘The problem with the news media is that the question is not about MTS, it’s about Russia, political risk, structural risk. It’s important to have a source authored by the company.’
Using a blog is also proving cost-effective for releasing smaller news items to the market. Sending press releases ‘for $6,000-$7,000’ makes sense for results, but doesn’t make as much sense if the company is just updating its tariff plans, said Tulgan.
The all-day conference, which also took place at the Renaissance Hotel, was split into four sections: the macroeconomic environment; IR best practice; changing investor focus, including debt IR; and setting priorities in the current market.
Much discussion focused on the fragility of the Russian stock market, despite its impressive performance this year, during which time it has more than doubled in value. ‘We don’t yet have a fully functioning market here,’ commented Neil Withers, senior vice president of IR and capital raising at VTB Bank, the Russian financial services firm majority-owned by the Russian government. ‘Investor relations has to operate in a less-than ideal world. How many people here have a pension plan or life insurance? Insurance companies don’t have a lot of money invested in Russian stocks. A lot of IR involves bringing in capital from the rest of the world.’
Withers warned, however, not to ignore domestic investor outreach. ‘Domestic IR is not irrelevant,’ he said. ‘VTB has 165,000 private shareholders now, 45,000 of them from the last two and a half years.’
Some delegates used the conference to express dissatisfaction with the current running of the Russian stock market, saying it offers few support services to listed companies and should look to exchanges in Europe and the US for help on how to improve. This occurred during the final panel discussion of the day, chaired by Ekaterina Nagaeva, head of the monitoring group at the listing department of Russia’s MICEX stock exchange.
The Russian exchange does not provide any value-added services, or at least does not provide enough information about them, said Irina Ostryakova, head of communications at agro-industrial company Cherkizovo Group. London is much better but at least it is open for contact and organizes investor days, she added.
‘If an issuer wants any additional services, we would be happy to know what they are,’ Nagaeva responded.
At the awards event in the evening, the other winners were:
Best adaptation to the needs of IR in a downturn
VimpelCom
Best IR by a CEO/CFO
Mark Gyetvay, Novatek
Best investor relations officer, large-cap companies
Alexey Bogdanchikov, Rosneft
Best investor relations officer, small & mid-cap companies
Masha Eliseeva, Comstar UTS
More information and photos can be found here (in Russian).
By Tim Human