Hawke's Bay Today

Share­sies shake up in­vestor im­age

Trade Me and NZX among big play­ers get­ting ex­cited about on­line plat­form work­ing to open in­vest­ing to all

- Paul McBeth COM­MENT — Busi­nessDesk

In­vest­ing is of­ten couched as some­thing rich peo­ple do — poor folk save. More than a decade of the state-spon­sored Ki­wiSaver scheme has seen a lot of those in­vest­ments swell to tens of thou­sands of dol­lars — big enough for peo­ple to lean on their providers over what they’re ac­tu­ally in­vested in.

But that hasn’t trig­gered a spill-over of in­vest­ment into other as­sets. Ki­wis still seem to stick their cash in the bank, with a re­cent Kiwi Wealth sur­vey show­ing a sav­ings ac­count was the sec­ond­most used in­vest­ment ve­hi­cle at 62 per cent of re­spon­dents, just be­hind Ki­wiSaver at 69 per cent.

Cue the usual Wellington re­sponse: “The Gov­ern­ment should do some­thing”.

Suc­ces­sive ad­min­is­tra­tions have obliged with wor­thy re­ports, in­ter­est­ing re­search and well-mean­ing strate­gies. The par­tial SOE pri­vati­sa­tions un­der the pre­vi­ous Gov­ern­ment at least got more peo­ple on to the reg­is­ters of power com­pa­nies if not into other stocks.

So it’s re­fresh­ing to see a mar­ket so­lu­tion show­ing real prom­ise. And out of the cap­i­tal, no less.

Two-year-old Share­sies pro­vides an on­line plat­form for peo­ple to make reg­u­lar small in­vest­ments in a range of funds. Both its 47,000 user­base and the $57 mil­lion in­vested through the por­tal have al­most dou­bled since the end of Septem­ber.

Share­sies had its ori­gins in the 2017 Ki­wibank-spon­sored fin­tech ac­cel­er­a­tor pro­gramme and has been in­ter­est­ing enough to make the big end of town take no­tice. Trade Me pumped in $4m last year and the start-up has just been ac­cred­ited as an NZX par­tic­i­pant.

Cash and ac­cess to cor­po­rate smarts is handy in the early life of a fin­tech com­pany, but NZX ac­cred­i­ta­tion shows they’re be­ing taken se­ri­ously.

The stock mar­ket op­er­a­tor has been at pains to re­vive the coun­try’s cap­i­tal mar­kets and has ended a two-year drought of fresh pub­lic of­fers with the some­what spec­u­la­tive Can­na­south list­ing and the up­com­ing float of Napier Port.

For Share­sies, ac­cred­i­ta­tion means a shift from of­fer­ing a range of man­aged and ex­change-traded funds to pro­vid­ing

di­rect in­vest­ments.

The firm’s goal is to re­move bar­ri­ers to in­vest­ing; its mantra is to give some­one with $5 the same in­vest­ment op­por­tu­ni­ties as some­one with $500,000.

A way to do that in share trans­ac­tions is by carv­ing up each share — known as frac­tion­al­i­sa­tion.

That sounds dry, but by open­ing the door for some­one

share to chuck $5 a week into a par­tic­u­lar stock, say Spark, it en­ables size­able stakes to be built up over time and elim­i­nates the need to have a chunky sum upfront to in­vest.

Share­sies has been talk­ing about ex­pand­ing its prod­uct range for a while, but co­founder Leighton Roberts says the move into shares was de­mand-driven.

“They wanted ac­cess to New Zealand stocks. The di­rec­tion came from our cus­tomers.”

That makes sense when in­ter­est rates around the world are su­per low and likely to go even lower.

While some­one could’ve re­lied more read­ily on the cash flow from bonds and term de­posits 15 years ago, in­vestors now ac­cept a cer­tain amount of eq­uity risk and are buy­ing shares in in­fra­struc­ture com­pa­nies, util­i­ties and prop­erty firms to se­cure re­li­able div­i­dends.

Share­sies has piqued the in­ter­est of all kinds of peo­ple, and is keenly fo­cused on build­ing a com­mu­nity.

As an on­line na­tive, web­based fo­rums are an ob­vi­ous way for it to spread the word.

But it doesn’t shy away from real life and is us­ing share club events where in­dus­try pro­fes­sion­als talk about in­vest­ing and field ques­tions from the floor.

The bulk of its users are un­der 40 and happy to use digital de­vices — not your typ­i­cal at­tendee at an an­nual meet­ing. That’s at­trac­tive to NZX chief ex­ec­u­tive Mark Peter­son.

“They’re very happy to look at dif­fer­ent types of in­vestors — that bit’s in­ter­est­ing for us,” he says.

“It fits ex­actly into the con­di­tions we’re try­ing to cre­ate here.”

Peter­son says ex­ist­ing bro­ker net­works and wealth man­agers cater to the high-net­worth crowd and in­sti­tu­tional in­vestors, while the likes of ASB Se­cu­ri­ties and Jar­den’s Di­rect Broking tick the box for DIY in­vestors.

The NZX chief is on a mis­sion to make the lo­cal mar­ket more at­trac­tive with up­dated list­ing rules and a new pric­ing regime. That’s prin­ci­pally to drive greater liq­uid­ity — a key plank for a healthy cap­i­tal mar­ket be­cause more ac­tiv­ity in a se­cu­rity should lead to more ac­cu­rate pric­ing.

Share­sies has put for­ward a pretty sharp of­fer with no min­i­mum charge and a 0.5 per cent fee for or­ders up to $3000 — think 50 cents to make a $100 in­vest­ment — com­pared to the $15 fee ASB Se­cu­ri­ties would charge.

That hits Share­sies’ mes­sage of bring­ing in­vest­ing to the peo­ple, how­ever its 0.1 per cent fee for any amount above $3000 stands up pretty well to the 0.2 per cent charge at Di­rect Broking on $15,000-plus and ASB’s 0.3 per cent fee above $10,000.

don’t ex­pect the ex­ist­ing play­ers to sit back twid­dling their thumbs. It could be the jolt the mar­ket needs.

They’re very happy to look at dif­fer­ent types of in­vestors — that bit’s in­ter­est­ing for us. It fits ex­actly into the con­di­tions we’re try­ing to cre­ate here. Mark Peter­son, NZX chief ex­ec­u­tive

 ??  ?? Share­sies founders (left to right) Ben Crotty, Sonya Wil­liams, Richard Clark, Brooke Roberts, Leighton Roberts, Natalie Bryant and Martyn Smith.
Share­sies founders (left to right) Ben Crotty, Sonya Wil­liams, Richard Clark, Brooke Roberts, Leighton Roberts, Natalie Bryant and Martyn Smith.
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