Perception Gaps Divide Chemical Companies, Investors

ByDeborah Austin Despite most chemical-industry executives' assertion that they invest in long-term value creation -- key for institutional investors -- 60% say the markets still undervalue their companies. But what defines long-term value creation? Conflicting answers may explain the dichotomy, suggests recent survey "Catalyzing Corporate Disclosure: Extracting Value in the Chemicals Industry" by global professional services organization PricewaterhouseCoopers. Of 28 value-creation indicators addressed in the survey, at least 80% of institutional investors agree on the importance of 15 indicators, and at least 80% of sell-side analysts, on 16. But among executives, that level of agreement existed regarding only seven indicators. Miscommunication may deepen the mismatch. Half of chemical executives perceive they are proactive in communications with investors -- but just 2% of investors believe chemical companies keep an active dialogue with them, and 13%, that companies initiate contact when there's new information to report. Investors and analysts say they'd like information avenues outside the traditional financial report -- including face-to-face presentations, Web sites and social/environmental reports.