Investors call for peer analysis

May 27, 2010

Website use up among survey respondents

Annual reports and corporate websites do not contain enough information covering peer analysis, according to new research from corporate reporting firm SAS and Thomson Reuters.

In a survey conducted among 50 pan-European buy-side and sell-side investment professionals, less than a fifth of respondents say there is sufficient information on competitors. Investors are most satisfied with information provided on strategy and objectives, including key performance indicators, with just over three fifths of respondents saying there is adequate coverage in this area.

That is not a very high number, however, suggesting companies still have a long way to go to please investors when it comes to disclosing information online and in print.

The survey also asked what part of the annual report investors read. The results show that financials receive the most interest, with 97 percent selecting this option. The operational review is the second most-read part of the annual report, followed by the chairman and CEO statements. Remuneration and incentives come in fourth. ‘The financial section of the annual report is the most useful portion for my job,’ one respondent comments.

On the topic of the internet, SAS’ report highlights the growing use of online resources by investors. Of the respondents, 90 percent say they use company websites frequently to support investment decisions, an increase of one third on the 2008 survey.

‘The research shows that the institutional audience continues to use corporate reports as one of their top research tools. Not surprisingly there’s an ever-growing emphasis online but content-wise, for many companies, there are still gaps in critical areas and concise, insightful reporting is the exception rather than the rule,’ says Adrian Parker, client partner at SAS.

By Tim Human