How to deal with the ongoing stock market turmoil from a financial communications perspective?
To achieve a fair market valuation over time is a long term commitment, which requires a sustained and coherent IR effort, where quick fixes are seldom or never available.
Each new crisis must be seen as an opportunity to add new information to the investment community, if requested or for that matter if possible to offer. Most of the crashes and crises that we have experienced, from the crash of 1987 to the current one, tend to have a specific theme; currency or geographic exposure or sector related etc. If so it may be relatively “easy” to respond to investors’ queries, if you haven’t already been proactive and included it in your external communication. The current “crisis” differs in respect to the fact that many of the underlying macro problems have been known for quite some time (PIIGS and the U.S., what happened to Ireland by the way?), but where the stock market fall was triggered by among other things, S & P’s downgrade of the U.S.
How should one deal with today’s stock market turmoil?
It is obviously difficult to provide a “one size fits all” answer to that question, but the rather dull answer is to continue with the long-term IR efforts. One option might be to look at things that the investment community characterize as good IR (see our Financial Market Survey 2011) and try to raise the level on these activities further. It may be such simple actions as to increase accessibility, provide faster feedback or to be even clearer and more precise in the financial/corporate communication.
Or as one analyst put in our survey on what characterizes good IR, which applies in both good and bad times:
“Accessibility, accessibility, accessibility”