SAO PAULO, Brazil, June 14 /PRNewswire/ -- International companies must
become more transparent to take advantage of the increasing numbers of global
investors on the Internet, PR Newswire President Ian Capps said today at the
American Chamber of Commerce.
"There is no question that the World Wide Web has arrived as a viable
investment tool. Four out of five investors report that they now access
corporate information via the web, up from only 22% in 1996. And this is an
entirely new breed of investor, the amateur or semi-professional, online
trader," Capps told representatives from global corporations and the media at
the chamber of commerce's headquarters in Sao Paulo.
Some of these new investors are trying to cash in on hot Internet stocks,
while others are managing their own portfolios now instead of leaving it to
someone else, Capps said. The Internet is allowing the individual investor to
conduct his or her own research and then place trades twenty-four hours a day.
There are an estimated 7.2 million investors trading online today with equity
assets of $420 billion, which are expected to triple by the year 2000, he
said.
Capps has been president and chief executive officer of PR Newswire since
1992, leading the company into its international and Internet expansions. A
graduate of Oxford University, he spent 17 years at Reuters in editorial,
sales and management positions including more than two years as chief of
Reuters' Sao Paulo bureau. For more than 35 years, he has been part of the
transformation of global communications.
According to Capps, the increase in online activity "could have a
significant impact on global corporations worldwide that are publicly traded,
many of them with ADRs listed on the U.S. stock exchanges. These individuals
are reshaping the market in ways we are just beginning to understand."
What is clear is that investors want easy access to company information,
from mergers and acquisitions to personnel announcements -- anything that will
affect the price of the stock. Disclosure, or transparency, of material
information by public companies in America is regulated by the Securities and
Exchange Commission, while international companies do not have such standard
laws. But today's investors are not limiting themselves to companies in the
United States.
More than 1500 foreign companies sold equity in the United States through
American Depositary Receipts in 1998, and the number is growing rapidly.
American institutions continue to invest more money in foreign companies,
especially as countries such as Brazil open up to investment. U.S. investment
in foreign companies increased exponentially from $91.5 billion in 1988 to
more than $600 billion in 1998.
International companies large and small are poised to attract new
investors worldwide, but they must actively disclose material information that
investors especially in America have come to expect, Capps said.
"This economy values the accuracy and timeliness of information as never
before, and the demand for quality and equality of information is only going
to intensify. We are now in a period of 24-hour, global trading, and
corporations must be complete in any statement they issue, because that
information can be traded on -- at any time -- somewhere in the world," he
said.
Companies also must consider how to issue material news. The SEC mandates
that American public companies must release material information in a way that
provides equal access to all investors, namely through distribution to
traditional media outlets such as The Associated Press, Dow Jones, Reuters,
Bloomberg and key local news outlets and trade press. In March, the SEC
specified that companies cannot issue material news on web sites before
sending to the traditional outlets to ensure fair access.
PR Newswire transmits news releases to the global media and financial
community on behalf of more than 33,000 companies throughout the world,
sending them to traditional media outlets 15 minutes before distributing them
across the Internet to databases, analysts, portfolio managers and trading
sites.
In his speech, Capps introduced a new product called the Brazil Financial
Newsline, which will give companies in Brazil the same ability to disclose
information through PR Newswire as U.S. companies do.
"Even with this traditional method of disseminating information, however,
companies are now going a step further because the information that's in a
press release isn't going to get into a newspaper for the individual investor
to see until the next day," Capps told the audience. "With the Internet
technology we now have, information is being disseminated today over the
Internet and through the financial news networks to individual investors far
faster than through the traditional press release."
Many companies have begun holding a cybercast of conference calls for
institutional investors to include a broader audience throughout the world.
Still other companies use PR Newswire to hold annual meetings live over the
Internet, at times tripling the number of shareholders who may participate.
Other powerful Internet tools that international companies may use to
build global audiences include NEWSdesk International, a high-tech company
that PR Newswire purchased in late 1998. NEWSdesk provides journalists with a
customized news service, and gives public relations professionals a way to
measure the effectiveness of their online activities. More than 7,500
journalists are registered to access news releases on healthcare and
technology from NEWSdesk alone.
Capps said global companies now must focus on using the Internet to the
fullest or they may be left behind.
"Perhaps the most dramatic impact of the early online services and now the
Internet -- is the ability it gives companies to communicate a message -- in
full text and unfiltered by the news media -- to a broad audience of potential
investors and consumers," he said. "With the global trend toward individuals
taking more control over their retirement plans and investment decisions --
the insatiable demand for corporate financial information will continue to
grow."
PR Newswire is the world leader in the electronic distribution of news
releases to the media and financial community, having founded the industry
45 years ago. With 29 U.S. bureaus, five overseas bureaus including one in
Sao Paulo, an exclusive partnership with Canada NewsWire and its vast network
of wire, fax, e-mail and Internet delivery, PRN serves the news release needs
of public relations and investor relations professionals worldwide.
For more information, please contact: Patricia Canary, PR Newswire's
director of Latin America, 305-461-8666, Patricia_Canary@prnewswire.com or
Renu Aldrich, PRN's public relations manager, at 212-282-1929, 800-503-2654
(beeper), Renu_Aldrich@prnewswire.com.
SOURCE PR Newswire
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Related links:
http://www.prnewswire.com
CONTACT:
Patricia Canary, director of Latin America,
305-461-8666, or Patricia_Canary@prnewswire.com; or Renu Aldrich,
public relations manager, 212-282-1929, or beeper, 800-503-2654,
or Renu_Aldrich@prnewswire.com, both of PR Newswire
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