How much research must advisers do on equities?

Chapman Tripp partner Roger Wallis said he could not remember another period quite like the one the market is currently experiencing. “With the strength of the products being made available and the interest in it.”

NZX said the Kiwi sharemarket was experiencing its strongest year in the past decade. By August, issuers had raised $2.4 billion of equity.  NZX’s equity market capitalisation has risen from $46.6 billion in 2008 to $77.9 billion in 2013, or from 27% of GDP to more than 37%.  Wallis said it looked set to continue.
He said there was still some uncertainty around how much work an authorised financial adviser had to do to get familiar with a product such as an IPO, before helping clients invest in  it.

The interplay of international securities laws meant that many organisations could not make their own research available. This was particularly obvious around the Mighty River Power float, he said. Companies who were part of the selling syndicate were not able to offer their research to anyone during a long blackout period.

Since then, there had been moves to address the problem, Wallis said. There is NZX-sponsored advice available on the impending Meridian float.