Iridium Unveils the World's First Machine Learning Algorithms that Decode the Value of Investor Relations - Seite 2

A significant finding of this study was that the quality of investor relations – based on the classification into IR-Agnostic, IR-Basic and IR-Emerging archetypes -  is a highly material factor consistently influencing valuations of GCC banks. In fact, for most models it was the third most important factor impacting price to tangible book value (P/TBV) and explained 6% of share price variability on average.

In addition, the impact of upgrading investor relations is significant, with each upgrade step in a 2-stage upgrade path, commanding a 12 percent valuation premium on average and a complete move along the investor relations upgrade path adding 24 percent to market capitalization.

To illustrate the impact of IR Quality with real-world examples, one bank (Bank A) currently operates at an 'IR-Emerging' level which adds 0.16x to its P/TBV valuation. Given the bank's current market capitalization of USD 33 billion, this translates to almost USD 3 billion of its market value, or the equivalent of USD 220 million in net profits. Considering the valuation uplift achieved by the 'IR-Emerging" level this is a compelling return on investment, being typically achievable with a USD 1.0 million annual IR budget. The converse is true for low IR quality.  Bank X currently operates at an 'IR-Agnostic' level, which in fact subtracts -0.07x from its P/TBV valuation.  

To download the full report "The Value of Investor Relations Quantified", please click the link below: https://quantlens.iridiumadvisors.com/iridium-quant-lens-machine-learning-for-investor-relations  

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About Iridium Advisors

Iridium Advisors is a management consulting firm and the Middle East's leading advisor on investor relations. The company was founded in 2015 in Dubai on the belief that first-hand capital markets and in-house senior management experience are central to the process of converting business value into shareholder returns. Our results-oriented experts design, build and operate transformational investor relations programs that help organizations and leaders engage, transact and grow - whether they are healthy, challenged or distressed. For information visit www.iridiumadvisors.com.

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