Shrink­ing NZ mar­ket nears cri­sis

The Press - - Business -

The num­ber of com­pa­nies list­ing on the New Zealand stock ex­change this year is neg­a­tive be­fore it has even started.

It was not a cri­sis yet, but with plenty of in­vestor funds float­ing about, money could start flow­ing out of New Zealand, Chap­man Tripp part­ner Roger Wal­lis said.

Chap­man Tripp’s New Zealand Eq­uity Cap­i­tal Mar­kets re­port, re­leased yes­ter­day, said the drop in the num­ber of com­pa­nies list­ing on the NZX last year was likely to con­tinue as a trend in 2017.

There were only three list­ings last year – Tegel, In­ve­store Prop­erty and New Zealand King Salmon – but many com­pa­nies chose to by­pass the NZX in favour of pri­vate sales or to list on an over­seas ex­change, par­tic­u­larly the ASX in Aus­tralia.

Wal­lis said this was not a good thing, and in fact there had al­ready been more delist­ings this year than list­ings. ‘‘We’re neg­a­tive be­fore we even get started.’’

The law firm only ex­pected about three list­ings in 2017, which it said was dis­ap­point­ing given the rel­a­tive per­for­mance of the ASX.

Wal­lis said there was a con­cern­ing trend of New Zealand com­pa­nies that were in­cor­po­rated here, had staff here and paid tax here but were opt­ing to list in Aus­tralia.

Some ex­am­ples last year in­cluded Pow­er­house Ven­tures, Vol­para Health Tech­nolo­gies and 9 Spokes In­ter­na­tional.

He said the NXT mar­ket, which launched in 2015 to tar­get busi­nesses worth be­tween $10 mil­lion and $100m, had not re­ally worked and crowd­fund­ing plat­forms, such as Snow­ball Ef­fect, had suc­cess­fully raised money for com­pa­nies in a num­ber of deals.

‘‘Money con­tin­ues to pour into Ki­wiSaver; I don’t think the sup­ply of funds is the is­sue. It’s not a cri­sis but it’s not far off.’’

Wal­lis sug­gested rolling the NXT and NZAX into one mar­ket was a no-brainer given their poor per­for­mance. –Fair­fax NZ

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.