Institutional Investor has revealed its annual rankings of individuals and companies which best uphold corporate governance standards and engage with investors in a transparent, meaningful way.
A total of 3,074 buy-side individuals and 858 sell-side analysts participated in the 2017 All-Asia Executive Team Honored Companies survey and nominated 2,510 companies across 18 sectors, based on six core attributes: accessibility of senior executives, constructive conference calls and meetings, well-informed and authoritative investor relations, quality corporate documents, quick response to requests and timely financial disclosures.
The survey revealed three key trends:
China’s rise to the top: More mainland Chinese companies climbed to the top of the rankings, edging out some of last year’s winners from India, Southeast Asia and Australia. Mainland Chinese banks ascended, with Merchants Bank and China International Capital Corporation earning the highest weighted scores in the banking sector.
Traditionally, India has dominated the Healthcare & Pharmaceutical sector, but this year, three mainland Chinese companies, CSPC Pharmaceutical Group, China Medical System Holdings and 3SBio, swept in and clinched the top three spots as Most Honored Companies.
The top six companies in the Internet sector all hailed from mainland China, led by Tencent Holdings, Alibaba, NetEase and Ctrip.com. With the recent inclusion of China’s A-shares in the MSCI Index and further opening up of the Chinese market, Asia provides increasing investment opportunities for global managers and Chinese companies are expected to reap the benefits.
However, China leads — but does not dominate — the regional technology sector: Despite the heavy hitters in China, India and Taiwan maintained their strong presence in this year’s tech sector rankings. India maintained its strength in the Technology / IT Services and Software sector, led by Infosys, Tata, HCL and Tech Mahindra, while Taiwan dominated the Technology / Semiconductor space, with Taiwan Semiconductor Manufacturing Corporation taking the lead.
Corporate transparency and value are the strongest areas of focus for investors: This year’s survey reached a new record in terms of nominated companies, indicating that investors are searching for value investments and have an increasing interest in corporate transparency. The number of buy-side voters more than tripled year-on-year, from 1,007 buy-side individuals and portfolio managers in 2016 to 3,074 this year. Sell-side voters also increased, from 611 analysts in 2016 to 858 in 2017.
“International investors continue to view the Asia Pacific region as a really good investment opportunity,” said Will Rowlands-Rees, Managing Director Institutional Investor Research. “This year we saw a real investor focus on Chinese companies at the expense of some more established markets like Korea and Australia, and their efforts to be transparent and trustworthy for domestic and international investors alike are being recognized.”
Institutional Investor’s confidential and unprompted voting gathers data from buy- and sell-side analysts and corporations to determine the rankings in four categories — Best CEO, Best CFO, Best IR Professional and Best IR Company — at Asian (ex-Japan) companies. Participating buy-side analysts manage US$1.5 trillion in Asian equities, excluding Japan. The title of “Honored Company” goes to businesses earning a top-three position in one of the four categories, while “Most Honored Company” goes to companies that secure two or more top-three appearances.
Weighted scores determine the ranks; each first place position is worth 3 points; second place, 2 points and third place, 1 point. Most Honored Company always ranks above Honored Company, regardless of score.
“We’re pleased to receive this recognition for our high standards of corporate governance, transparency and investor communication, which are vital to the long term success and sustainability of our business,” said Wang Xiaochu, Chief Executive Officer of China Unicom, the top-ranked Most Honored Company in the Telecommunications sector.
Last year, four companies captured first place in every single category in which they were eligible to compete. This year, however, only one company seized the first place title in all four categories — Taiwan Semiconductor Manufacturing Corp., the world’s largest semiconductor foundry, outshining others in Technology / Semiconductors.
Of the 18 sectors, Chinese companies took the top spot in 8 industries while Hong Kong companies seized the top spot for 6.
“Although it’s clear that Chinese companies are raising their state of play, Hong Kong is maintaining its historical status as a regional financial and business center trusted by investors year in and year out,” Rowlands-Rees said.
Hong Kong-based Link Real Estate Investment Trust achieved Most Honored Company status in the Property sector, with its Chief Executive Officer ranking first.
“As a company wholly owned by private and institutional investors, this ranking is extremely important to us because of the perception it represents,” said George Hongchoy, Chief Executive Officer of Link Asset Management Limited, the manager of Link Real Estate Investment Trust. “We consider Institutional Investor ranking the gold standard and review the list each year for guidance on staying competitive, continuing to provide the highest level of transparency around our business, and engaging with investors in Asia and beyond.”
Source: Media Release