IPO communications form a major part of the financial PR business, with 60 to 70 IPO programmes a year. A further growth factor is that if you handle the IPO communications programme well, there is a very high likelihood that the client will retain you after the listing. However, out of the 1,000 plus listed companies, only an estimated 30 per cent retain a consultancy.
The rest use PR agencies on an ad hoc basis, in-house facilities, or do no PR at all. This ratio has not changed in the past few years, while the number of agencies specialising in this field has increased.
Industry players have to find ways not only to grow with market demand, but to improve service quality. This means that financial PR cannot be served by PR practitioners with only PR or marketing backgrounds, or those with excellent media connections. They also have to be intimately acquainted with the financial and equity markets, to be able to provide valuable advice to clients. Many professionals within the financial market, such as research analysts, auditors, bankers, financial reporters, and even regulators, have joined the industry. These professionals are better able to convince the client that the advice given follows the rules and regulations, which are now much stricter and more demanding than before. In addition they are also in a better position to know what investors and shareholders want.
To succeed, industry players also have to consider their investment in the company. Capital investment is now required for expensive systems, such as email systems, database systems, on- and off-line capabilities, etc. In the financial PR field in particular, the audience is more demanding in terms of the timing and accuracy of the information provided.
A third factor that financial PR companies need to consider is their international network. There are an increasing number of mega deals in Hong Kong that require global services. Even an international PR chain may not provide the best solution for these clients as, across the chain, standards can see significant variance. It is important that the IR services provided for a project are of the same quality and standard throughout the network.
In assessing the market, the scope of work provided by Hong Kong firms to their clients is relatively limited, compared to the US or Europe.
The reasons for this are that listed companies in Hong Kong are comparatively less transparent and local investors are more speculative. However, financial PR consultants need to think about how they can add value to listed companies by not only carrying out activities that simply meet minimum statutory requirements.