NZX plans to scrap junior markets
Stock exchange operator NZX Ltd plans to fold its junior equity markets, the NZAX and NXT, into its main board, which is called the NZSX but is often just referred to simply as the NZX.
The NZAX and NXT were designed to let smaller companies raise capital and have less rigorous compliance rules than the NZSX, but have failed to thrive.
NZX said its current structure was not effective in meeting the needs of New Zealand’s smallest listed companies.
It might let smaller companies operate under different rules from larger ones when it pooled them together on the the NZSX, it said.
But it had yet to decide how that might be achieved.
NZX chief executive Mark Peterson said the NXT, which has just four listings, hadn’t developed as quickly or effectively as had been hoped.
Supporting smaller listed companies remained very important for NZX, he said.
‘‘We look forward to progressing conversations with all stakeholders over the coming months, including working with current and potential listing candidates to provide the right path for them,’’ he said.
NZX would start consultations on the structure of its equity market and its listing rules in the next few months, he said.
NZX critic Tony Falkenstein, who is the chief executive of Auckland-based water-cooler company company Just Water, said wrapping the NXT and NZAX into the NZSX was ‘‘probably the most pragmatic solution’’ which he was likely to support.
‘‘The NXT was never going to work.’’
Falkenstein said NZX’S policy of trying to promote the shunned NXT while not accepting new listings to the NZAX meant there hadn’t been any new listings of small companies for the past 21 months.
‘‘It has been a real problem. The mantra today is ‘fail fast’. If it is not going to work get rid of it.’’
NZX will hold its annual meeting in Wellington on Friday and Falkenstein has put himself up for election to its board.
‘‘I think private investors will be backing me, but I don’t know the way the funds will throw their weight,’’ he said.