Trends in financial communications.

1. Communicating Business Agenda
to Investment Community
Sahala Sianipar
Managing Director, Corporate/Financial Practice, Asia Pacific
Burson-Marsteller
Twitter: @ssahala
Singapore, 26 September 2011

2. Content
 Trends in financial communications
 Developing financial communications plan
 Discussion
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

3. Trends in Financial
Communications

4. Asia Pacific as Global Capital Raising Centers
US$53 Billion raised via IPO in Hong
Kong Stock Exchange in 2010 (Financial
Pictures courtesy of www.bloomberg.com Times, 2011)
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

5. Asia Pacific Companies Influence Global Merger & Acquisition
Top Target Countries by Volume 2010 (US$ billion)
Source: Bloomberg
37.21
65.57 110.31
35.12
84.07
China Hong Kong Australia Japan US
Bloomberg 2011 M&A Outlook Report:
 2010: 8,700+ deals announced worth US$594 billion
 Highest M&A activity in financial industry
 Largest deal by Asian company was Bharti Airtel’s purchase of Zain Africa (US$10.7 billion)
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

6. Active Buying by Asia Pacific Companies in 2011
Where active buyers are expected in 2011?
Source: Bloomberg Poll (2010)
7%3%
7% Asia Pacific
Central Asia
45% North America
South & Central America
22%
Western Europe
Affrica & Middle East
13%
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

7. Transparency Demand
Picture: www.thedailybeast.com
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

8. Real Time and Multiple Channels
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

9. Case Study
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

10. Rapid Evolution of Issue into Crisis
 It is more difficult to plan for a crisis given the changing communications
landscape
Source: Burson-Marsteller & Penn Schoen Berland Global Crisis Preparedness Survey 2011
50%
Global
37% 35%
31% 29%
25%
Need to respond Overall challenges More globalized Increased public Increased anti- Rise of citizen
extremely quickly of digital nature of demand for corporate journalism / social
communications communications transparency sentiment in public media (e.g.
and/or media Facebook, Twitter)
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

11. Asia Pacific Companies Likely to Encounter Crisis
Source: Burson-Marsteller & Penn Schoen Berland Global Crisis Preparedness Survey 2011
67%
59% 61%
55%
46%
GLOBAL
APAC
EU
US
LATAM
Have experienced a crisis
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

12. Impact of Trends
Understand Asia Pacific, its diverse
constituents and influencers as well as
operating landscape
Connect the dots – global and locally
Invest to align internal and external
communications that support business
objectives
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

13. Developing Credible Financial
Communications Plan

14.  “A corporation managed by responsible managers will be a
responsible corporation; a corporation managed by
irresponsible managers will be an irresponsible corporation.
It is individuals who are responsible for what corporations
do.”
Harold Burson
Founder Chairman, Burson-Marsteller
November 2008
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

15. Financial Communications Plan – An Overview
 Define your objectives that are aligned with
corporate/business objectives
 List core/priority stakeholders and influencers
 Develop messages
 Identify communications channels
 Define monitoring approach & tools
 Identify issue or crisis triggers related to your
company and industry
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

16. Issues Mapping
Regulatory Stakeholders & Influencers
 Business competition  Regulators
 Environmental compliance  Customers
 Business permits  Investment community
 Foreign investment  Market commentators/analysts
 Compliance  Local community
 Traditional media
Operational  Bloggers/online influencers
 Service quality
Reputational
 Data security
 Global/local corporate reputation
 Business partner
 Product reputation
 Employee relations
 Stakeholders’ knowledge of the company
 Transparency
 Corporate responsibility commitment
 Business competition
 Disclosure
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

17. Case Study
 Situation Analysis
• A state agency claimed that a major listed bank in Indonesia did not exercise
prudent banking when it disbursed loans to several companies
• Loans were fully collateralized and companies were affected by 1997/98
financial crisis, which required debt restructuring
• The report by the state agency also claimed that the bank’s senior management
never reported these loans to its shareholders
• The report was leaked to a couple of first-tier local media, which generated
headlines even by Jakarta-based international media
• The government launched an investigation and subsequently criminal charges
against senior management of the bank
• The bank’s institutional investors were concerned and rating agencies were
about to issue updated ratings of the bank’s papers.
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

18. Case Study – cont’d
 Integrated approach to investor and stakeholder communications
• The bank quickly updated its institutional shareholders on the situation
• The bank pointed to its information memorandum prior to its listing that provided
details of the bank’s exposure to the various companies mentioned in the report
• In other words, the bank had been transparent all along and the report did not
provide any new information that investors had not known
• The bank assured its key customers of its financial and operational soundness
as it had set aside sufficient and conservative provision for those loans
• The bank also reached out to its key controlling shareholders that in turn,
provided public backing of the bank’s strategy and its ability to handle the
situation
• The bank disseminated regular updates to media (domestic and international),
which were tracked by the investment community
• Employees of the bank were regularly updated of the management’s action to
address the situation.
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

19. Case Study – cont’d
 Results
• Whilst the bank’s stock price was down, no major institutional
depositors/customers withdrew funds from the bank
• S&P affirmed its ratings of the bank’s papers despite the public
controversy in Indonesia
• Institutional investors recognized there could be other motivations from
the charges against the bank
• Key shareholders of the bank also publicly spoke in support of the bank.
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

20. Case Study (2)
 Situation Analysis
• A major Asian telecommunications company that is listed in the New York Stock
Exchange was accused of committing irregular derivative transactions
• The allegation was raised by a politician in a parliamentarian hearing involving
senior government ministers and chairperson of the capital market supervisory
board
• First-tier national and international newswires immediately picked up the story,
which became headlines
• Sell-side analysts called the company to seek clarification
• Institutional investors questioned the company’s transparency, risk management
and good corporate governance practices
• At the same time, the politician threatened to file a criminal lawsuit against the
company.
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

21. Case Study (2) – cont’d
 Rapid response and integrated approach to investor and stakeholder
communications
• The objective of the communications program was to protect the level of
stakeholders’ trust on the company
• Core stakeholders included regulators, business customers, shareholders & investors
around the globe, and employees
• Company highlighted its disclosure compliance as required by the US Securities
Exchange Commission in its regular filings
• Company’s executives reached out and briefed capital market supervisory board,
industry regulators, investment community (sell and buy-side analysts, rating
agencies), media (domestic and international) and influencers (e.g. think tanks)
regarding the company’s derivative policy, which had been instituted and disclosed
regularly
• At the same time, the Company issued regular statements via multiple channels
(online, website, traditional media) to correct earlier media reports.
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

22. Case Study (2) – cont’d
 Results
• Chairman of the capital market supervisory board issued a statement that
cleared the company from the allegation; the chairman also spoke in front of
members of the national parliament
• Investors were satisfied with the explanation that the share price did not suffer
from major decline
• Third parties such as research analysts and industry commentators published
articles in leading local media supportive of the company’s risk management,
disclosure and good governance practices.
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS

23. In Summary
 Asia Pacific companies are expected to be more active
in regional and international trade & investment
 Stakeholders including investors will demand more on
good corporate governance, disclosure, and
transparency from companies
 U – Understand your financial communications goals
and stakeholders in Asia Pacific
 C – Be able to connect the dots, globally and locally in
today’s digital age
 I – Be prepared to invest in aligning internal and
external communications capability including crisis
preparedness and monitoring tools.

24. THANK
YOU