In 2018, we expect to see a number of major African corporates looking to go public on the London Stock Exchange and potentially the New York Stock Exchange.

In early November, there were reports that three of the continent’s largest telecommunications tower companies plan to list on either the LSE or NYSE in the coming 12-18 months.

The same month, there were reports that giant telco Econet was eyeing a London listing, suggesting that 2018 will be a potentially active year for African companies looking to go public.

Closer home, in the first half of 2017, the listing of Vodacom Tanzania was the largest deal in the region out of five companies who listed on the local African bourses. This should signal an exciting time ahead for African companies looking to make a quantum leap to become truly global firms.

However, experience shows that much of the work takes place long before the listing day, with many companies failing to understand the implications of being a listed company.

An initial public offering, whether international or local, is a key milestone in the lifecycle of a company and provides a unique opportunity for it to launch a fresh narrative.

Even more important, companies and senior management sometimes underestimate the differences between pre and post-listing life.

As such, companies need to carefully consider life post-IPO, making sure to build a proactive investor relations (IR) programme that raises their profile and communicates their business strategy. This should be positioned in a way that promotes and supports a company’s long-term business goals.

With the Dar es Salaam Stock Exchange and Nairobi Securities Exchange seeing growing interest from foreign institutional investors, companies that list on either exchange should realise that they are no longer Kenyan or Tanzanian but pan-African or even global.

In today’s business environment, where stocks can rise and fall due to a simple tweet or a misstatement by a CEO or senior executive, an underrated aspect of an IPO that achieves maximum value is the ability to control a company’s media narrative and communicate this effectively during all three phases of the IPO process: Preparation, execution and post-IPO.

Digital strategy

In East Africa, the growth of digital communications presents investor relations teams with an opportunity to change the way they engage with the investment community. Without a strong and direct digital strategy for investor and financial communications, companies will fail to reap the benefits of this critical communication channel as it continues to grow.

Digital media, including social media, are fast becoming the go-to communication channels for key stakeholders, including investors and the wider financial community.

But companies’ presence and investment in digital media are not evolving at the same pace as investors’ information-gathering habits. Investor relations teams can no longer ignore the growing role that digital media play in communication with the investment community.

Time invested now in understanding investors’ changing behaviours and preferences in the way they consume information — particularly of the digital nature — will pay dividends in the future. Investor relations teams should leverage emerging technologies to listen to the investment community and use those tools to shape the way they communicate and interact with investors as well as the wider financial community.

The following are important aspects of the IPO process that companies and senior executives should consider before pursuing a stockmarket listing:

Company IR website

As companies in the region seek to diversify their shareholder bases, the foreign institutional investors they target will turn to their websites, especially the IR section, for information about the company.

Research shows that more than 80 per cent of investors globally use a company’s website during their research, a key tool for communicating a company’s equity story. International investors see the quality of information available on a company’s website as a key differentiator when evaluating investment opportunities.

As such, it is in the interest of companies in East Africa looking to attract foreign ownership to adopt best practices when it comes to the IR sections of their websites.

Company social media accounts

Given the incredibly high use of social media and the significant mobile penetration rates in the region, social media will remain a key communication tool as IR teams seek to engage with local investors. Social media is increasingly used by investors globally to gather information about a company.

With increased foreign-investor interest in the region, there is a huge untapped potential audience in East Africa and beyond that can be targeted via the right social media channels.

Building best-in-class IR function

In today’s investment environment, shareholders are increasingly demanding accountability from corporate management and exerting their influence over companies’ business affairs and corporate governance. To anticipate, pre-empt and defend against shareholder overreach, companies must develop customised strategies to proactively and transparently engage with shareholders, analysts and other influencers.

Most importantly, a new narrative should be prepared long before listing day. Within this context a robust corporate communications function and understanding will need to be built. The infinite news reel demands a comprehensive communications strategy for every day.

Lyndsey McCusker and Ahmed Salim are senior associates at Teneo, a firm that provides financial communications and investor relations advisory.