So much so that the share prices of financial services organisations are suffering from the disclosure of too little financial information to the market, it added.
The study also reveals a clear link between share price and non-disclosure of company information.
The aim of the study, which was conducted between April and November 1999, was to measure gaps between the beliefs of CFOs and the investment community, looking at the value of financial reports and what each of the interested parties think about them. 51 institutional investors, 36 analysts, 39 banks and 26 insurance companies in Australia, Canada, Europe and the US participated.
Ian Dilks, European Leader of PwC's Insurance Practice, said:'As the market demands more transparency, financial services organisations can use their communication with the market for competitive advantage, attracting longer term investors and helping to raise their share price, and lower the cost of capital.
'Only 20 percent of investors, 23 percent of bank analysts and 11 percent of insurance analysts considered companies very open with their disclosure policies. By contrast, 38 percent of European bank executives and 69 percent of insurance companies said their disclosure policies were very open.'
All groups acknowledged that improved disclosure would create higher share prices. Again these groups had different opinions in what information should be reported and what sort of information would be useful.
Management ranked measures such as employee satisfaction, regulatory reputation, delivery/distribution channels, brand equity, and key customer statistics at least 20 percent more important than did investors and analysts. At the same time, the capital markets reported that large information gaps continue to exist in more than 15 performance measures such as customer retention, quality of management and market risk exposure.
Another clear finding that was agreed by a large majority of those surveyed (62 percent of analysts, 63 percent of investors) is that the markets are too focused on short-term earnings which is also impacting on the share price of financial services companies.
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