About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Thursday, September 21st, 6:53PM
Check out GoodReturns TV now! Dismiss
Latest Headlines

Exchange's future important to all New Zealanders

Tuesday, January 16th 2001, 8:40AM

One of the big issues for investors, and indeed all New Zealand, this year is the future of the New Zealand Stock Exchange (NZSE). It's big from an investor's point of view because what ever happens may have a significant impact on the value of listed companies, and it's big on the country's economy front because the exchange is a major capital-raising vehicle.

There are two issues which, while separate, are related. One is the demutualisation of the exchange from a member owned society to a company structure. Wellington Central MP Marian Hobbs has ensured this issue will be dealt with in the first quarter by agreeing to sponsor a bill in Parliament that will allow the process to happen.

Demutualisation is old hat for the financial services industry now and there should be little problem with the process.

The second issue, the future of the NZSE, is separate, but linked. Should it merge with the Australian Stock Exchange, should it maintain the status quo or should some other path be taken?

At this juncture it's impossible to tell where this issue will go.

What does appear certain though is that the management of the exchange appears determined to push its case for a merger to a conclusion whatever the opposition. So far it has held its cards close to its chest. It has revealed only the scantiest of information about why a merger is good business sense, what the pros and cons are, or how it would benefit the country.

It's showed little inclination to publicly discuss the issues, and it has hired the reputed hard-man of PR, Shandwick, to run its information campaign.

With so little information out there it's hard for people to come to a well-considered opinion.

When considering the options people need to have in the forefront of their minds that the primary goal of a stock exchange is as a vehicle for raising capital.

This is the main benchmark that any proposal should be considered against. The fact that the NZSE is highly efficient and can transact trades at the fraction of the cost of the ASX is a minor issue.

What New Zealand's economy needs is an efficient market where its businesses can raise capital to grow, expand and employ people. All options need to be considered against this benchmark.

On the business front people need to consider the future of stock exchanges around the world. Are stock exchanges as we know them the right vehicle for raising capital and trading shares in the new millennium, or are they a hangover from the 20th century? Has globalisation and technology made them a threatened species.

Globally exchanges are grappling with this issue, and most of the major bourses talked about cross-border merger and acquisitions. However, the success rate of clinching any of these deals has so far been low.

Stock exchanges are acting like a bunch of sex-craved teenagers at a party, all intent of trying as many partners as possible. None have yet found their ultimate life-long partner.

One has to wonder if all this M&A talk is just a last gasp attempt at empire protection in the facing of an advancing threats from globalisation and technology?

The other major threat is Electronic Commerce Networks or ECNs. ECN are essentially electronic trading platforms where shareholders can buy and sell shares. They are big in the US and New Zealand has one tiny ECN in the shape if iExchange.

The beauty is that they are cheap to run, can operate across borders, 24 hours a day and they are efficient.

The issues facing the exchange and its members are huge at present and they have an impact on New Zealand's economy. A decision of this magnitude should not be left to the exchange itself.

Special Offers

Commenting is closed



Printable version  


Email to a friend
News Bites
Latest Comments
  • Sovereign sold
    “@Mr Slater I don't think so. An Aussie story I saw said the price was 16.9 times 2017-18 pro forma earnings. That story...”
    4 hours ago by Murray Weatherston
  • Sovereign sold
    “It looks like AIA may have now joined the Big End Of Town. Hopefully that isn't a negative thing and they continue to act...”
    4 hours ago by Comprehensive Planner
  • Sovereign sold
    “Large financial institutions are divesting themselves of wealth management capabilities presenting threats and opportunities...”
    4 hours ago by Pragmatic
  • Sovereign sold
    “Murray I hope it wasn't a case of 'buy one get one free'?...”
    5 hours ago by Mr Slater
  • Sovereign sold
    “While we should probably never give the bi little Scotsman a chance to gloat, David what exactly was your recommendation? Second...”
    7 hours ago by Murray Weatherston
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.79 5.05 ▼5.19 ▼5.49
ANZ Special - 4.55 ▼4.69 4.99
ASB Bank 5.80 4.75 4.99 5.29
ASB Bank Special - 4.45 4.69 4.99
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.59 ▲4.75 5.09
BNZ - Std, FlyBuys 5.90 4.99 5.29 5.59
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.45 5.50 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 5.00 5.20 -
Housing NZ Corp 5.79 ▼4.75 ▼4.99 ▼5.29
HSBC Premier 5.79 4.09 4.29 4.89
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.95 5.15 5.59
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.55 4.65 5.09
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special 5.00 - 4.75 -
SBS Bank 5.89 4.99 ▼5.19 5.59
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.59 ▼4.69 5.25
Sovereign 5.90 4.75 4.99 5.29
Sovereign Special - 4.45 4.69 4.99
The Co-operative Bank - Owner Occ 5.75 4.55 ▼4.69 ▼4.99
The Co-operative Bank - Standard 5.75 5.05 ▼5.19 ▼5.49
TSB Bank 5.80 4.80 5.15 5.45
TSB Special - 4.55 4.69 4.99
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.99 5.19 5.59
Westpac - Capped rates - 5.26 5.36 -
Westpac - Offset 5.95 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 4.59 4.74 5.09
Median 5.82 4.78 4.99 5.29

Last updated: 20 September 2017 10:08am

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%


About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
Site by Web Developer and eyelovedesign.com