There has long been varied opinions about the value of Retail Investors to listed companies. Many AIM listed companies ignore retail and focus on a small number of larger, high net worth or institutional investors to fund their business.
The key issue with this strategy is that of liquidity and the impact a lack of liquidity can have on a company’s share price. Recent research from the Office of National Statistics (ONS) and independent research from Hardman & Co both conclude that listed companies, especially on AIM and NEX ignore Retail Investors at their peril.
“Focusing only on institutions is no longer going to cut it. Ignoring retail is not only unfair on these investors, but it also neglects a key generator of liquidity. Such a path may prove ultimately fatal for the public life of a company. “ Hardman & Co February, 2020
How Important are Retail Investors?
The actual percentage of shares held by individuals is difficult to assess accurately because of the amount held in nominee accounts. However, both the ONS and Hardman research shows the overall percentage is increasing, year-on-year and for some markets such as AIM and NEX, it is significant. Even for the Main Market, the ONS data shows that outside of the FTSE 100, 20% of shares are held by individuals.
Another important factor to consider is the average trade size on the stock markets and the impact this has on share prices. Hardman research shows that over 80% of all trades on AIM are below £10,000 and indicative sample data shows that this is the also true for 75% of Main market trades.
Hardman goes on to state:
“Our survey shows that the private investor is even more important because, on most days of most months, for most companies, these investors set the share price. “ Hardman & Co February, 2020
Consequently, all listed company CEOs and CFOs should invest time in Investor relations and actively court the retail investor.
Boost Your Investor relations
Reaching this important audience can be done through a variety of Investor Relations activities including exhibiting and speaking at investor-focussed events.
Here at Dave Mutton Consulting, we work with the three major annual investor expos and can give you more information and help you maximise the opportunity they represent.
Coming up in 2020…
First this year is the Master Investor Show on Saturday 28 March. Held at the iconic Islington Business Design centre, the show attracts more than 5,000 retail investors and hosts 100+ exhibitor stands and more than 50 speaking slots across three stages.
On Saturday 25 April, attention turns to the UK Investor Show held at the QEII conference centre, opposite the Houses of Parliament. With an expected attendance of over 3,000, this show has a long history of bringing together listed companies and retail investors.
Later in the year Mello Events holds a 3-day Investor event 19th-21st May in the Clayton Hotel, Chiswick, West London. The Mello event attracts 700+ high quality investors for an interactive programme of seminars, speakers and exhibitors.
This event has been so popular and highly regarded in recent years that, as of last year, an extra 2-day Mello event was organised and held in November, also in Chiswick.
“Each of these shows can be instrumental in building a dialogue and communication between listed companies and both new and existing investors. Feedback from attendees always shows how much they value the opportunity to interact with company management teams and hear their investment story first-hand.” Dave Mutton
If you would like to know more about any of these shows and discuss booking a stand, please contact Dave Mutton, Director of Dave Mutton Consultancy.Dave Mutton Consulting
+44 20 3290 4291
dave@consulting.mutton.co.uk
www.consulting.mutton.co.uk
Twitter: @dbmutton
LinkedIn: Dave Mutton
