15947554 Underwriting Placements and the Art of Investor Relations Presentation by Sherilyn Foong...

8/3/2019 15947554 Underwriting Placements and the Art of Investor Relations Presentation by Sherilyn Foong Alliance Investment Bank Berhad Malaysia

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Underwriting, Plac ements

and the

Sherilyn Foong

Direc tor / Head o f Equity Ca pita l Markets

Allianc e Investment Bank Berhad

11 June 2008



Underwriting & Plac ements

2



Stages Of An IPO

Coordinateeffo rts of a ll

Coordination ApprovalProcess

StatusReview

CompletionProcess

PostCompletion

Liaise with therelevant

Monitorprogress

Underwriting,placeme nt &

Follow-upon any

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advisers, i.e. duediligence,sub missions,documentations.

authoritiessuc h as theSec uritiesCommission,ForeignInvestment

Committee,Ministry ofInternationalTrad e &Industry, BursaSec urities.

periodically.

distribution.Pric ing.

Roadshows.

Resea rc h &marketing.

Investor

Relationsstrategy.

Despa tch o fProspec tus.Listing.

conditionsthat may beimp osed bythe releva ntauthorities.



Fac ilita tor of equity & eq uity- linked transac tions

Interfac e between non- retail buye rs and sellers of equity & equity-linked instruments.

Sourc ing of new IPOs & Private Plac em ents for the Bank. Advising c orporate c lients on eq uity ma rket c onditions and the

suitability to undertake equity or equity-linked transactions.

Role Of An ECM Unit Within An Investment Bank

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Underwriter of IPOs

Ensuring tha t the req uired equity funding for the Comp any isavailable in the event o f an IPO undersubscription.

Risk undertaken invo lve subsc ribing for the underwritten shares in the

event of undersubscription.

Plac ement Agent

Sourc ing for new investors that would be interested to ac quire new / existing Private Plac em ent shares be ing offered by the compa ny / existing shareholde r(s) a nd fac ilitating the resultant prima ry / sec onda ry m arket transac tion.



Underwriting

Underwriting - where an Investment Bank / Universal Broker agreesto subsc ribe for any unsubsc ribed shares that has been issued / offered by a n Issuer.

Objec tive - ensuring that the required equity funding that a

Com pany needs is availab le in the event of an undersubsc ription.

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In return for the risks undertaken, there is an und erwritingcommission.

For large issues, a Manag ing Unde rwriter may b e a pp ointed to

ma nag e the Co -Unde rwriters.

Underwriting Ag reement is the primary legal doc ument.

Only the shares offered to the pub lic and em ployees (p ink forms)are typically underwritten in an IPO.



Placements

Plac ement - Plac ement Agent, usually the sam e as the Adv iser,will plac e out shares reserved under Private Plac ement portion toqualified investors.

Objec tive - to look for quality shareholders and to those who c anbring value to the company.

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Book-building - pric e d isc overy m ec hanism to determine “m arketpric e” of an IPO which norma lly c onduc ted for well known largerissues.



Book-Building Boo k-build ing is an e xerc ise where

investors submit b ids throughout the offe r

period, indica ting d ema nd and price

sensitivity.

Investors pay a t a single p rice

de termined a fter boo k-building to solic it

indications of dema nd b y the com pa nyand und erwriters, usua lly lowe r tha n the

Placements Via Book-Building

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highest b id to c rea te a n ove r-

subsc rip tion a nd stab le a ftermarket.

Advantages Roa dshow s will gene ra te pub lic ity and

awareness for the IPO.

Establishes a larger institutional shareholderbase and grea ter stab ility in a fterma rket.

Provides an ind ic a tion of the m arketva luation o f the IPO sha res to reta il investo rs.

Lea ds to a more favourab le p ric ing o f theretail tranche.



Plac ements - Targeted Investors

Statuto ry Bodies

Insuranc e Funds

EPF, PNB, Lem baga Tabung Haji, …

AIG, Grea t Eastern, Prudential, …

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Reac hing OutTo TheInvestmentCommunity

Unit Trust Funds

Corporates

High Net Worth Ind ividua ls

Others

Hed ge Funds

, , …

Public Mutual, Pac ific Mutual, …



Investor Roadshow

Whilst promoting the underlying equity “ story” , we a lso g ive c lientsthe widest “ footprint” in terms of investors to p lac e-out the sharesto.

By do ing so, we generate the strongest possible demand & interest

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.

Our p lac ement to quality plac ees will in turn increase thelike lihood o f a strong after-m arket share price pe rformance.

ECM will work with spec ialists in investor relations and theinvestment c ommunity c omprising of fund manage rs andinvestment ana lysts to ma ximise m arket ac cep tance o f the equitystory.



IPO Institutiona l Placement - Live Case Study

Typ ica l Plac ement Allocation Of A Main Board Compa ny

Local StatutoryBodies

6%

Corporates

3%

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High NetWorth

Individuals45%

InstitutionalFunds46%

Local & Foreign



IPO Institutiona l Placement - Live Case Study

Book Building Demand Allocation

Loc al Statu tory

Bodies6%

Loc al & Foreig nInsurance

Funds17%

Loc al Statuto ry

Bodies17%

Loc al & Foreig nInsurance

Funds20%

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Institutional

Funds

77%

Institutional

Funds

63%

Loc al & Foreig n Loc al & Foreig n



Funds Ra ised In 2007 (exc luding REITs)

Sec ond Board

17%

RM357,039,263

MESDAQ Market

2%

RM47,560,600

IPO Sta tistic s

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Main Board

81%

RM1,701,544,930

Number Of Listing s Exc lud ing REITs

Main Second MESDAQ Total

2007 12 8 3 23

2008* 2 4 5 11

Average Forward PE

Main Sec ond MESDAQ

2007 9.16 8.16 10.11

2008* 10.99 7.83 9.29

* Com pleted IPOs between the months of Jan- Apr 2008.



The Art of Investor Relations (IR)

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IR - What It Is

IPOs is like a 1st marriage - once in lifetime e vent.

To ensure m any “ hap py returns” , its IR strategy needs to be c arefully thoughtout & planned , and c onvincingly executed.

IR is the continuous dia logue between your Com pa ny and investors and /

or the c hannel med ium that feeds the info to be conveyed to investors.

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Proce ss of c rafting & d elivering your Comp any ’s story to the investmentcommunity, demonstrating its strengths and investment worthiness.

IR a fight for spac e in the me dia for the hea rts & minds of investors.

Amplifies your Com pa ny’s succ ess in executing its business strategy b yproviding greater rec ognition and ac ceptanc e.

Not just about prom otion. Not a substitute for a Comp any ’s fundamentals.

Consider hiring an IR professional - when doing the job, let’s do it right.



Elements of an IR Programme

Converting Investors

to Buy Fund manager’s briefing

Analyst briefing

News releases Profiling

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Investible Position

Investor Awareness

& Preference

Media briefing

Focus on:-

Industry nic he & b usiness

Highlight ma nageme nt’strac k rec ord & experienc e

Emp hasize financ ial trackrec ord & performanc e



How To Start

Basic sc ope o f work for an IR programm e. Therefore, you need to:

identify your Com pa ny’s key business drivers;

recognise your Com pa ny’s streng ths & wea knesses;

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c rea te & prepare key themes & concise c orporate messages;

develop a pro-ac tive IR c omm unication plan; and

once all the above is ready, imp lement and c ontinuouslyimp lement the IR prog ramme over the next 18 mo nths.



Nuts & Bolts of IR

Objec tive - simplifying your Compa ny’s complex story to basic,positive messages to be c onveyed ultimately translating theshares of your Com pa ny to be an attrac tive investmentdestination.

Eac h IR ma terial should c ontain no more than 3 or 4 keymessa es.

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When formulating key messages, the KISS (i.e. Keep It Simple,Stupid ) princ iple works best (ma x. of 20 words).

Consistency of messages & its c ommunic ation is key.

Crea te & establish an “ IR Tool Kit” .



IR Tool Kit - Essentia ls

At the minimum, an IR Too l Kit should at least conta in:

Fact sheet(s) containing company history, profile, biodata ofdirec tors and key ma nagement pe rsonnel and website a dd ress;

Rec ent quarterly financ ial statem ents (relevant po st-IPO) a nd themost recent annual report;

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Rec ent press and media c lipp ings / announc ements; and

Contac t deta ils on the key IR pe rson(s) in your Comp any .

Don’ t forget to: tailor the IR Too l Kit to convey the key m essag es to b e brought

across;

use c lear & unamb iguous language;

ensure layout & forma t of IR Too l Kit is user friend ly; and

constantly review, ed it and update the IR Too l Kit to ensureinforma tion timeliness & releva ncy.



Newsworthy Key Messages

Examples of positive key messag es might inc lude:

growing PAT. exp ansion of ma rgins. diversifica tion related to existing c ore c ompetenc ies.

new c ontrac ts c linched, entry into a new m arket. dividend payout increase.

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appo ntment o g pro e n v ua nto t e sen or managementteam whom is ab le to further value-a dd.

sec tor / industry growth and your Compa ny’s positioning w ithin it.

Emphasis that your Company’s business strateg ies and expansionplans are sound , rea listic & ac hievable.

The experienc ed , c apability and trustworthiness of seniormanagement to m eet expec tations.

Being transparent, responsible a nd acc ountab le for dec isions / actions.



Building Positive Media Relations

Always be :

ac cessible and ava ilab le to the med ia, even after office hours.

responding fast to queries.

having more than 1 spo kespe rson.

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fast trac king med ia calls.

Steps to dea l with wrong reporting or misquotes:

First, double-c hec k repo rt to ascertain the mistake / misquo te.

Sec ond , determine seriousness of error on Com pa ny / self.

If serious:

call the journalist.

then send letter to the ed itor.

Last, request for a retrac tion / c larification of error soo nest.



“ No-Nos” When Dealing With The Media

When engag ing w ith the med ia, DO NOT:

say “ no comm ents” .

say “ off the rec ord” .

say a nything whic h ca sts your Company in a bad light, or ba d-

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mou ng your c ompe ors.

disc lose too muc h about yourself / your Compa ny.

lie or make-up stories.

“ Som etimes you say it best, when you say nothing a t all…”

overanswer.

request to c heck and comm ent on the med ia p iece before release / publication.



Continuity Is Key

IR is an on-g oing proc ess, in good times and bad . Therefore, yourCompany needs to:

continuously ge t on & c ontinue be o n investors’ rada r sc reens.

Mana gem ent pro-ac tiveness is paramount. Coming c lean is essential in order to b uild& ga in trust with investors.

Maintaining c lose co ntac t with the analyst, fund m anag eme nt & financ ial med ia

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.

establish and wide n analyst / financ ial media c overage .

Provides supp ort to the IR prog ramm e via c reation and ma intaining awareness of yourCom pa ny to existing / p otential investors.

Plays a large influenc e & shap ing investor perc ep tion.

increase the num be r of new shareholders - bo th reta il & institutional.

1 on 1 m ee tings with b uy-side / institutiona l investors works best.

build a b roker network to maximise liquid ity and trad ing op po rtunities.



Fina l Word Of Warning

When talking to the media about yourCompany, be mindful of what is beingdisc losed / revealed, as c erta in information

c ould be pric e sensitive and/ or be subjec t to

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before public release, under the SC and BursaMalaysia’s guide lines / listing rules.



THANK YOU

Sherilyn Foong

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Direc tor / Head ofEquity Capita l Markets

-E-m ail: sherilyn@allianc einvestment.com .my

M. Irtiza Azme l M. Isma ilAssoc iate Direc tor

Equity Capita l Markets

Tel: 03-2717 6682 (Direc t)

E-m ail: m iazmel@allianc einvestment.com.my

Jason Lee

Senior Mana ge rEquity Capita l Markets

Tel: 03-2717 6681 (Direc t)E-m ail: jason@allianc einvestment.com .my



This presenta tion w as prepa red by Allianc e Investment Bank Berhad (“A lliance ” ) exclusively for the b enefit a nd internal use o f our c lient t o indic a te, o n a preliminary ba sis, the fe asibility of a po ssible transac tion(s). The te rms an d structure of the po ssible transaction(s) in this presentation are preliminary only and implementation is subject to, inter alia, the satisfactory outcome of due diligenc e (including legal a nd financ ial) of the client. Ac co rdingly, the terms and structure o f the p ossible transac tion(s)and their imp lementat ion ma y b e subject to material cha nges.

This presenta tion is prop rieta ry to Alliance and may not b e disclosed to any third party or used for any other purpose without the p rior written co nsent of Allianc e .

The information in this presenta tion is ba sed upo n m ana gem ent representations and reflec ts prevailing c ond itions and our preliminary views as of this date, which are ac co rdingly subject to cha nges. In preparing this presentation, we have relied upon and assumed, without independent v erif ic at ion, the ac c urac y and c ompleteness of al l information prov ided by management. Accordingly, Allianc e and its officers, ag ents or employees do not give a ny representa tion or w arranty, e xpress or implied, with respect to the information pertaining to the financial position, condition, operation, business and prospects of the client nor shall we or any such pe rson be liab le for any information o r omission in the information p ertaining to the financ ial

po sition, cond ition, ope ration, business and prospe cts of the client. Allianc e is not a cting as an ad viser or age nt to any p erson to whom this presenta tion isd irec ted . Such p ersons must m ake their

own inde endent a ssessment of the c ontents of thi a er, should not treat such c ontents as ad vice or reco mmend ation b

Disclaimer

25

Allianc e and its officers, age nts or emp loyees on investment ma tters, legal, ac co unting or taxation ma tters and should c onsult their o wn ad visers. Ac cordingly, such persons are deem ed to rely on their own information and assessment as they deem nec essary in order to m ake a ny investme nt d ec ision with respe c t to th e sec urities in this presenta tion and their own a ssessme nt of the merits and risks of any investment in the securities in this presentation. In this respect, Allianc e and its officers, a gents or employees shall not accept any responsibility and shall not be liable for the economic risk or any consequences sustained by such pe rsons arising from a ny investme nt in the client a nd/ or the sec urities in thispresenta tion.

All pric ing o f sec urities and the po ssible transac tion(s) show n in this presenta tion a re for illustrative purp oses and are subje ct to changes as the actual pricing shall only be determined at a later date, after receipt of relevant regulatory approvals and shareholders’ ap proval a nd closer to the launc h of the possible transac tion(s) a fter taking into c onsideration the prevailing capital market conditions, economic conditionsand industry specific conditionsat that time.

Allianc e and/or its affi l iates may act as principal or agent in any transaction(s) contemplated by this paper, or any other transactionsconnected with such transaction(s), and may asa result earn brokerage, commission or other income.

Nothing in this paper is intended to be, or should be construed as an offer by Alliance and its officers, a gents or em ployees to buy or sell, or invita tion to subscribe for, any sec urities.

Neither Allianc e nor any of its direc tors, emp loyees or rep resenta tives are to have any liab ility (including liab ility to any pe rson by reason of negligence or negligent misstatement) from any statement, opinion, information or matter (express or implied)arising out of, contained in or derived from or any omission from the presentation, except liability under statute that cannot be excluded.

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