Contact us:Ashwani Singla,     Shefali Khanna,       Penn Schoen Berland, South AsiaManaging Director   Director, Marketin...
Penn Schoen Berland’s survey                                                                                              ...
Understanding the forces that drive                                                                                       ...
24 months 2 Will the market look Markets to move up in                                                                    ...
Previous Decade                 Next Decade             3 Which are the                            Pharamaceuticals made t...
C3 Gold Standard of Corporate Equity                                                                                      ...
Competitiveness is driven by                                                                                    Top factor...
Generally not                                                                                                             ...
Penn Schoen Berland - Winning Strategies For Financial Competitivenss
Penn Schoen Berland - Winning Strategies For Financial Competitivenss
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Penn Schoen Berland - Winning Strategies For Financial Competitivenss


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Survey Carried out by Penn Schoen Berland aims to better understand the internal and external factors that drive valuation & financial competitiveness & also help companies become relevant and compelling to Financial Influentials. As per Ashwani Singla, Corporate Image is a key differentiator & by focusing on the right fundamentals and having good investor relations will make your Company financially competitive.

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Penn Schoen Berland - Winning Strategies For Financial Competitivenss

  1. 1. Contact us:Ashwani Singla, Shefali Khanna, Penn Schoen Berland, South AsiaManaging Director Director, Marketing 603, Unitech CyberPark,& Chief Executive Sector 39, M: +971 111 8615 Haryana, IndiaM: +98 1107 5843 www.psbresearch.inThanks to our partners Winning Strategies for Financial Competitiveness
  2. 2. Penn Schoen Berland’s survey Why & How Of The Poll among Financial InfluentialsTM Objective Aims to better understand the internal and external factors that • To help companies become drive valuation & financial competitiveness. relevant and compelling to Financial Influentials Methodology The analysis of our online survey among 101 years in the financial world and commanding financial Bizfluentials from Equity Research an influence of $10 billion supports a positive • An online survey conducted Houses, Private Equity Funds, Investment sentiment toward the economy, with more than between August 8 - 30, 2012 Banks, Mutual Funds, and Portfolio Management 75% of financial players believing that the market is in Mumbai Companies with a minimum experience of 8 headed in the right direction. • PSB’s proprietary C3 (C-Cube) framework was used for drawing insights Strategic Investors 35 (PE Funds / IBankers) above 15 yrs yrs Financial Investors 42 above 15 (MF / Portfolio Managers) Endorsers 24 (Brokerage Houses / CRAs) N = 101 10-15 yrs yrs 10-15 Years of work experience 2Years of work experience8-10 8-10 yrs yrs ©Penn, schoen & berland associates, llc. *Disclaimer: The information contained within is the property of Penn Schoen Berland & Associates. No part of this document may be copied or reproduced without the written consent of Penn Schoen Berland & Associates. Failure to do so may invite legal action as appropriate.
  3. 3. Understanding the forces that drive The Investment Climate Relies On winning strategies Three Critical Questions Competitiveness is best described in the words of Charles Darwin, 1 How are we feeling Portfolio Management Portfolio Management who said, “In the struggle for survival, the fittest win out at the expense Credit Rating Agency Credit Rating Agency about the economy? Credit Rating Agency of their rivals because they succeed in adapting themselves best to Portfolio Management their environment.” Brokerage House Private Equity Brokerage House Investors and endorsers Brokerage House Even in the marketplace, it’s not the strongest who win, but ones most responsive and adaptable to change. Today, for business leaders and Private Equity feel positive about Private Equity CXOs, it is a constant struggle to adapt to a fast-changing business Contact us: Mutual Fund environment. It’s not just about making the right choices for themselves Mutual Fund Penn Schoen Berland, South Asia 603, Unitech CyberPark but for all their stakeholders – employees, business partners, clients, the direction of Indian Competitiveness drivers customers, policy makers, shareholders and investors. economy. Sector 39, Gurgaon Mutual Fund of the financial markets I Bank Ashwani Singla, Haryana, India Managing Director & Chief Executive, I Bank Berland, South Asia Penn Schoen 2012 I Bank Even as the economy slows down, investors and endorsers feel that India’s economy will remain Thanks to our partners: resilient, irrespective of the policy issues. Four-fifth Ashwani Singla, of the Bizfluentials who participated in our survey The key questions that businesses Managing Director & Chief Executive said that they believe the Indian economy is on the right track. Strategic Investor need to understand for financial 74% of strategic investors believe that Indian 90% 53% 91% 75% 79% 80% M: +98 1107 5843 competitiveness are Strategic economy is in the right direction, 83% of financial Financial Investor investors and 79% of endorsers also feel positively Investor Endorser Strategic direction of theEndorser about the Financial economy. Shefali Khanna, Investor 1. How do financial investors choose the right business Director, Marketing Investor 91% of portfolio managers, 79% of brokerage Endorser houses and 75% of Bizfluentials working for mutual to invest in? Financial Investor funds saw the Indian economy moving in the right M: +971 111 8615 direction despite all the clutter, making financial 2. How can one understand these choices? investors and endorsers a much more optimistic group than strategic investors.3 3. What does one need to do in order to gain a Among the key concerns raised by strategic and financial investors and endorsers, were scams, competitive edge? poor governance and tardy policy implementation. Thanks to our partners: We try to find the main factors that will drive strategies to make companies more relevant and compelling to their investors. ©Penn, schoen & berland associates, llc.
  4. 4. 24 months 2 Will the market look Markets to move up in Growth No. up in the near future? 12-36 months Up to +5% 09 +5% to +10% 46According to our study, the market outlook remains Despite the optimism about the economy, it was +10% to +15% 26positive in the 12-36 month horizon. Aligned to clear that when it came to stock picks, most wouldthis, is the investors’ preferred investment horizon study both past track record and closely view the More than +15% 11of 1-5 years, even as scams and poor governance future potential of a company before investing. -5% 04continue to be top of mind concerns. 7 out of 10 participants said that they believed in51% of the participants believed that the stock balance between past and the future before taking -5% to -10% 03market would witness a ~5% growth over a 12- a call. However, 20% were willing to pay a premium 10% to -15% 0036 months window, while only 2% said that the on the perceived future of a company and 13%markets would see a 15% jump over 12 months. said they still rely entirely on past track record as More than -15% 01One-fifth of the Bizfluentials surveyed feel that this perceived in the public.might happen, but over the next 36 months. 12 months 36 months Growth No. Growth No. Up to +5% 51 Up to +5% 03 +5% to +10% 15 +5% to +10% 21 +10% to +15% 15 +10% to +15% 49 More than +15% 02 More than +15% 20 -5% 11 -5% 01 -5% to -10% 04 -5% to -10% 02 6 10% to -15% 02 10% to -15% 02 More than -15% 00 More than -15% 02 ©Penn, schoen & berland associates, llc.
  5. 5. Previous Decade Next Decade 3 Which are the Pharamaceuticals made the largest leap up the ranks as the next big influencer set to make a huge Infrastructure 1 Real Estate Sectors that will impact on the market. While Bizfluentials ranked it Real Estate 2 Infrastructure 11th most important sector in the last decade, this drive the Market? year Pharma is among the Top 5 sectors that will Banking, Financial Services and Insurance 3 Energy & Resources – Oil & Gas / Power / Electricity play a major role in the next ten years. Pharmaceuticals all set Infrastructure, Real Estate, BFSI, and Energy Energy & Resources – 4 Banking, Financial Services Contact us: Oil & Gas / Power / Electricity and Insurance shaped the last decade and will continue to be the to emerge as the next Penn Schoen Berland, South Asia key sectors for growth over the next. High Tech, 603, Unitech CyberPark Telecommunication Infrastructure 5 Competitiveness drivers Pharma/Biotech big influencer ICTS, Capital Goods will remain among the Top 10 Sector 39, Gurgaon influential sectors. Technology & IT services 6 Telecommunication financial markets of the Infrastructure Haryana, India Steel/Metals/Alloys 7 Technology & IT services 2012 Telecommunication Services 8 Steel/Metals/Alloys Top sectors by Investors Thanks to our partners: Ashwani Singla, Auto 9 Telecommunication Services Managing Director Strategic & Chief Executive Investors Financial Investors Endosers Capital Goods/Engineering 10 Auto 1 Real M: +98 1107 5843 Estate 1 Real Estate 1 Energy & Pharma/Biotech 11 Infrastructure Related Resources 2 BFSI 2 Infrastructure Consumer Processed Goods 12 Capital Goods/Engineering 2 Infrastructure Shefali Khanna, 3 Infrastructure 3 Pharma & Media & Entertainment 13 Consumer Processed Goods Director, Marketing Biotechnology 3 Real Estate 4 Energy & Travel & Hospitality 14 Travel & Hospitality Resources M: +971 111 8615 4 Energy & 4 Pharma & Resources Biotechnology Infrastructure Related 15 Education 5 Pharma & Biotechnology 5 BFSI 5 Technology7 & IT Education 16 Media & Entertainment Aviation 17 Aviation Thanks to our partners: ©Penn, schoen & berland associates, llc.
  6. 6. C3 Gold Standard of Corporate Equity VisibilityTo identify what drives Authenticitycompetitiveness DistinctivenessThe C3 framework is used to strategically manage corporate image, also Characterreferred to as corporate reputation or corporate equity. This dynamic Consistencyframework helps board members and CEOs decode and monitor thestakeholders that have maximum impact on the company’s image. It helps Marketdecision makers focus on what the company needs to do & say in order to Performancepersuade stakeholders to take action that gives companies competitive edge. Financial PerformanceThe C3 framework looks at three ‘Dimensions’ of corporate equity:Character, Capability & Communication. Each of these Dimensions comprises Communication Talentof ‘Attributes’ that define a company’s equity and each Attribute has a set of Development‘Strategic Actions’ that impact its equity. C3 not only establishes the correlation Competitivenessbetween these actions and the most important stakeholder expectations, italso benchmarks a company’s relative standing vis-a-vis its peers, thereby Customerproviding a clear direction on what it needs to do in order to stand apart from Citizenshipits competitors. EmployeeWe have used the C3 framework to generate insights into what the financial Capability Citizenshipinfluentials consider before they invest or make a recommendation to invest. Business Practices & Ethics Corporate Responsibility 10 Transparency & Governance ©Penn, schoen & berland associates, llc.
  7. 7. Competitiveness is driven by Top factors for Financial Competitiveness fundamentals Factors 1 Market Traditionally, fundamental financial analysis is about determining the value of a stock by looking at the Performance variables that are directly related to the company, making stock-related and financial parameters more (Capability) important for hedging risks than as a crucial differentiator. The underlying message from the financial influentials who participated in our survey defined what financial competitiveness means for today’s businesses. 2 Corporate Contact us: Image (Character & Penn Schoen Berland, South Asia Communication) 603, Unitech CyberPark Competitiveness drivers Sector 39, Gurgaon of the financial markets Financial competitiveness is about Haryana, India 3 External Risks 2012 focussing on the right fundamentals and (Macroeconomic Factors) getting the fundamentals right Thanks to our partners: Ashwani Singla, Managing Director • The fundamental Capability of the company in terms of its management team, business practices, & Chief Executive 4 Financial and financial stability Performance (Capability ) M: +98 1107The fundamental Character of a company in terms of its corporate vision for the future, transparency • 5843 on business associates, employees and governance • The fundamental Communication of its clear vision for the future and how successfully the company communicates its character and capability to its stakeholders Shefali Khanna, Director, Marketing Often, in looking at the minutiae, the bigger picture consisting macro-economic factors and company M: +971image in the minds of stakeholders can be overlooked. Several factors impact value, but Bizfluentials feel 111 8615 that it’s the external factors that exert most influence on company equity.11 Efficient use of resources and macroeconomic factors top the list for leaders in the financial world, but they must also be careful about what drives investors. Our survey showed a clear distinction within preferences of different kinds of investors within the Top 5 drivers. Thanks to our partners: ©Penn, schoen & berland associates, llc.
  8. 8. Generally not controversial Leading brand/ Is a trend setter s in portfolio Shows a clear vision of Invest in building Global the future of the company safe & healthyCompetitiveness Fierce but fair and the industry work environment Ability to balance competitor both short term Build a Market 1 Market performance Corporate Image 2strong and long term Lower than industry goals Establishes high average attrition Loyal Character corporate governance standards rates Leading Create competitiveness toCustomer gain The ability to manage Generally in the Makes full disclosures, Financial investors, with their lesser interest Track record of base a winning edge. especially when thingsucts Market Share resolving customer risks and interestof minority go wrong build athe Protect clean news for right drivers, prefer to rely on capable in business reasons management teams, positive news coverage and image is rewarded by financial indicators, such as debt-equity ratio, cash issues quickly and shareholders ble & dynamic efficiently Edge the market. So, focus on reserves and earnings per share. Being closer toagement team Among the various drivers that affect Market Fair & progressive Performance, strategic investors focus on global Claims always governance and engage bymarket movements, financial investors also rely on employer competitiveness and market share while financial backed proof Disassociate shareholder Unique/Niche Introduces new investors value a capable management team higher products & services business Critical with stakeholders to market indicators like share price/volume volatility interest from management and share group. than endorsers, who look at the future potential of the ahead of others build the right image. Invests in Local Communities business as a key valuation parameter. Endorsers look for the management’s ability to hold Focus on governanceexpectationscustomers Strategic investors are looking for a clear vision and tranperanc views that are not just determined by Create Differentiation for a winning Edge Important and shareholders – their revolving Inorganic Focus on governance and long and short term goals, is for the future and expect full disclosures from the company, even during difficult times. Strategic by the market tranperancy rewarded around a balance of disassociated shareholder Create Differentiation for a winning Edge growth rewarded by the market Company leadership transparency and investors also care about the larger role played by visible at is interest from that of management. important public the company, be it in establishing high governance platforms standards or corporate social responsibility. Generally not controversial Focus on Leadingportfolio governance and tranperancy is brand/ Ability to Managenot Generally Risks & Build a Cleage Is a trend setter Is a trend setter s in Leading brand/ rewarded portfoliothe market s in by controversial is Rewarded by the Market Shows a clear vision of Invest in building Global Shows a clear visionfuture of the company the of Invest in building safe & healthy Competitiveness Global Generally not Fierce but fair the future of the and the industry safe & healthy company work environment Competitiveness Ability to balance Fierce but fair controversial and the industry work environment competitor Ability toboth short term balance competitor Build a Lower than in both short term term and long Build a strong Lead the Market Lead the Market and long term goals goals a clear vision of strong Establishes high Establishescorporate governance high Lower than industry average attrit average attrition rates Shows the future of the company Invest in building safe & healthy Loyal Character Makes full disclosures, Character corporate governance when thingsstandards rates and the industry work environment Loyal standards especially Leading Customer Makes full disclosures, go wrong Claims always Generally in the Reliable and of Leading Customer Makes full disclosures, Generally in thebacked by proof Reliable and of high quality products Market ShareShare Market Build a record of Track base especially when things Protect the right news for right go wrong Strengthen Track record of base Lower than industry especially when things Protect the news for high quality products resolving customer Establishes high strong resolving customer average attrition go wrong interestof minority reasons reasons issues issues quickly and Character corporate governance quickly and rates Communication interestof minority shareholders efficiently standards shareholders Capable & dynamic Capable & dynamic efficiently Edge Edge Shows a clear vision management team Makes full disclosures, Generally in the of the future of the management team especially when things Fair & progressive & company and the industry Fair progressive Protect the news for right go wrong interestof minority reasons employer employer Claims always Claims always shareholders Unique/Niche Generally in the backed by proof backed by proof Unique/Niche Disassociate shareho Disassociate shareholder Edge Introduces new new Introduces Edge news for right reasons 14 interest from management from manage interest business business Fair & progressive Critical Critical products & services products & services employer Claims always Generally ahead of others others ahead of backed by proof Invests in Local Invests in Local not controversial Disassociate shareholder Communities interest from management Communities Critical Critical Invests in Local Communities Important Company leadership is visible Important at important public platforms Inorganic Inorganic Important growth Important Company leadership growth Company leadership is visible at Company leadership important public is visible at is visible at platforms important public ©Penn, schoen & berland associates, llc. important public platforms platforms