A survey by the Australasian Investor Relations Association (AIRA) has found that a majority of investors want Australian listed companies to release their financial results before the market opens for morning trading.
More than 71% of fund managers and equity analysts want ASX listed companies to follow the lead of major foreign equity markets and release their quarterly, interim and annual financial results either before trading begins, or after the market closes.
In the US, companies on the East Coast generally release their earnings results before market open, while those on the West Coast after market close. Virtually no companies in the US release their results during the trading day, as happens more often than not here in Australia.
AIRA's CEO, Mr Ian Matheson, said: "Participants in our poll have a clear message for companies and the Australian Securities Exchange (ASX). They prefer to read and analyse earnings numbers earlier in the day, so that during hectic profit reporting seasons they can be better prepared before share trading commences and ahead of company briefings. We hope that this feedback encourages more listed entities to act."
Many Australian companies retain the practice of holding board meetings to sign-off on the profit results immediately before they are released publicly, but new disclosure rules make this no longer necessary. Releasing before or after market close would also level the playing ground further, allowing retail investors time to digest the news, something they may not have the luxury of doing during the trading day, and a practice we would wholeheartedly support.
ASX Limited (ASX: ASX), owner of the stock exchange, has recently changed its practice to enable more pre-opening announcements to be made, but it could go further and encourage listed companies to release their results outside of trading hours, giving all participants a fair go.
The AIRA poll also found that investors preferred company briefings to be made via webcast to conference call, rather than meetings held all over town. Some companies with a substantial retail shareholder base such as the Commonwealth Bank (ASX: CBA), National Australia Bank (ASX: NAB) and Westpac Banking Corporation (ASX: WBC), or a recently listed company might prefer to hold a face-to-face meeting.
Foolish takeaway
Any move that allows retail investors the same advantages as institutional investors is a good move in our books. Let's hope listed companies listen to what their investors are saying.
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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned.
