Yana Baranovska, bachelor’s degree student

Lulko M., senior lector, scientific adviser

National University of Life and Environmental Sciences of Ukraine

Financial relationships

Financial relations are a form of Public Relations which helps in marketing financial services, building a relation with financial audiences. Companies that are listed in the stock exchange or market need to communicate with individuals or organizations, they need to send reports on their activities and their performance. A financial relations consultant helps building brand awareness of the company within the financial sector and with media in general. The publics here are investors, media houses and opinion formers.

Arrangements for the sharing of revenue between the national, provincial and local sphere of government will evolve further in future years. Whilst addressing some outstanding concerns, this year’s approach has also raised further issues that need to be addressed. This year’s formula will serve as the starting point for calculating the horizontal division in subsequent years, but it is likely that adjustments will also be made to the framework. The present approach has drawn strongly on the reports of the Financial and Fiscal Commission dealing with both the provincial division and the financing of local government. Comments of the FFC on this year’s approach to provincial revenue sharing have contributed to the refinement of the model and new population data have been introduced. The FFC will make recommendations in 1998 to be taken into account in preparing the framework for the 1999 Budget.

Foundation for future financial relations

Overall, a better understanding of actual expenditures is important for informing decisions about the vertical division. In addition, incorporating final census figures, other new data and elements of demographic change will be necessary. Government recognises, however, that stability in the overall intergovernmental financial framework is a pre-condition for sound financial planning and responsible government. The approach outlined here serves to establish a firm foundation for future intergovernmental financial relations.

For example, the stock exchange has two sets of individuals, one comprising of the investors who invest money and the company that needs money from the investors. Companies sell shares and bonds to other companies or individuals to raise capital to increase growth of the organization, to return capital to original investors and to increase salaries or provide incentives for employees. The stock market basically helps companies to grow by raising the capital.

Similar to other forms of PR, a financial company has its own publics, they are mainly institutional investors, analysts, media, trade press and internet news services. Institutional investors comprises of shareholders who have and had purchased stocks and prospective shareholders. Investment banks lend money to organizations, so that they can start a company, usually in a business plan the organization has a separate area which deals with financial costs that would be incurred while operating an organization. Financial or investment analysts help investors to understand the risks involved while buying shares or stocks from an organization. They basically help in analysing financial trends and potential problems with companies.

Media relations involve contacting business newspapers and magazines; national and regional publications explain the stock market. Magazines have in-depth articles about organizations, the profits and losses they have incurred or new sectors- products or services they have made. They are basically opinion leaders. Trade press and Internet news services help organizations in a similar way as the media; they help in disseminating information related to the organization.

Financial relations is very important for companies, they need to inform the various publics about changes in the organization. An organization needs to inform its investors about profits and losses, this is usually done through external newsletters. These newsletters act as a form of communication between the company and its investors.

References:

1. http://www.treasury.gov.za/documents/mtbps/1997/5.pdf

2. http://blog.mbaco.com/what-is-financial-relations/

3. http://2012books.lardbucket.org/books/individual-finance/s07-02-comparing-and-analyzing-financ.html

4. http://www.startuphughes.com/blog/startups-finance/