Anemona Stanomir
Marketing & PR Manager, XTB România
There is no doubt that the capital market in Bucharest will be “in the spotlight” this year, and terms such as IPO (Initial Public Offering –the process through which a company is listed at the stock exchange) will become common topics of conversation in most social circles.
2014 has just started, yet, already, there are multiple signs that the capital market will only go from strength to strength. For example, the consortium made up of Raiffeisen Capital & Investment and Morgan Stanley has been selected to handle the upcoming Hidroelectrica’s IPO. And they were selected among top competitors – Goldman Sachs, Citigroup, JP Morgan, Deutsche Bank – all indicating the significance of this event that will take place on the Romanian capital market. Other important local and state-owned companies, such as Electrica and Oltenia, are also scheduled to be listed before the middle of this year.
In this context, the public is already “flooded” with articles related to the capital market that explain the technical details regarding these listings, where analysts explain why they are important and where experts estimate the potential of investment on the local capital market. What is clear is that if these listings do happen in 2014, it will be safe to assume that financial communication will intensify.
As a vital component in a market economy, financial communication benefits both large and local investors by helping them better understand the investment potential that companies (who are considering capital market financing) have. Financial communication also helps attract foreign investors that are looking for opportunities within the local capital market. And last but not least, there is a need for complementary financial communication for interested beginners and potential future investors, who understand the importance of the capital markets and of exploring it but need to know more about it.
This is where we come along. We are the people who speak in layman’s terms, who “translate” yields into “how much you get in return”, who tell you that you shouldn’t feel embarrassed if you don’t know what margin trading is, while, at the same time, explaining the benefits of being financially educated. While the specialised publications will be speaking about “the big picture”, XTB Romania is the one focusing on helping you identify and understand the myriad of pieces that make up the “puzzle”.
Since entering the local market in 2008, we have dedicated our resources to financially educate the public. We took this approach because we realised that, in order to advocate the “portfolio investment” concept, we need to be able to address a public that understands the basic concepts of financial markets, and this cannot be done if the terminology is understood only by a handful of people This is why we started building up this market and have succeeded to educate more than 30,000 people over the last 5 years.
We did this by developing specific communication tools that serve different audiences. In addition to the numerous daily materials prepared by our analysts (available on our website), we also share on our social networking sites and distribute to the media, materials that address aspects that concern the day-to-day life of the population; for example, the price evolution of staple foods, such as sugar, corn, wheat. We explain how macroeconomic indicators as well as the global and local news can influence these prices.
We also show how certain financial analysis tools can help you correctly estimate the evolution of various financial instruments. Taking a step forward, we explain what would have been the profit if specific instruments had been traded (commodities, indices, foreign exchange pairs etc.), while also pointing which instruments could have the highest potential of investment in the near future. Such analyses are meant not only to inform, but also to help people asses their potential of investing in financial markets, using tools that they were not aware of, or familiar with, before.
A very good example is a 360 integrated campaign launched with the Romgaz IPO, last year in November, when we used the new dynamic context of the Romanian capital market to our customers’ advantage. Our analysts put together a report in which the Romgaz listing was “translated” in common terms, so that everybody interested in the topic would understand. The report also contained the price evolution forecast for the following months, together with its impact on the investors’ chances of profitability. We were pleasantly surprised to notice that the campaign engaged not only active “actors”, but also potential investors that were interested in finding out more about this phenomenon. This is why we decided to continue launching similar reports for the upcoming IPOs (Hidroelectrica, Oltenia and Electrica).
As mentioned above, financial communication will be paramount this year, considering the dynamic context of the capital markets that we find ourselves in. Therefore, we are committed to use not only specialised media channels, but also general interest media, through which we will communicate the importance of financial education in today’s socioeconomic environment. Basic and objective information is necessary considering the fact that the “avalanche” of news and articles regarding the Romanian capital market in 2014 is actually increasing the attractiveness of financial investments. We will continue to provide not only journalists but also our customers, with extensive information that would help inexperienced, potential investors identify the advantages of being financially literate, while also mentioning the risks that come with the lack of education.
With the occasion of the IPOs that are scheduled for 2014, and as part of our educational program, XTB Academy, we are bringing world famous traders, together with our analysts, closer to the public. For this reason, we have signed a 12 months agreement with the well-known American stock trader, a living legend of Wall Street, Dr. Alexander Elder, which will hold a live, interactive, free of charge, webinar where he will discuss the investment potential of the most important instruments on the financial market.
The conclusion is that, in this year’s socioeconomic context, the need for financial education is incontestable and inextricably linked to our communication strategy. Without education, our business activity would be incorrect and incomplete. Therefore, we will need to adapt our messages to satisfy this year’s capital market changes, evolution and trends. It will be a busy and interesting year, not only for the capital market, but also for us, financial services communicators.
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