Shrinking NZ market nears crisis
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