About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Sunday, March 24th, 5:30PM
Latest Headlines

Fund managers: What next for NZX?

Fund managers are worried a lack of listings on the NZX may be unsustainable.

Tuesday, October 30th 2018, 6:00AM 1 Comment

In the past year the NZX has had one primary equity listing and 20 primary debt listings.  There were eight de-listings on the main board last year and one IPO.

For the third quarter of 2018, the share market operatorhad a 3.8% drop in total revenue year-on-year. Wealth technologies revenue was down 27.3% while fund management revenue was up 24.7%. Revenue from continuing operations was up 3.8%.

Earlier in the month Elevation Capital called for an overhaul at the NZX, wanting it to focus on doing “a few things better”.

Rebecca Thomas, founder of Mint Asset Management, said whether the NZX was sustainable as an independent exchange was the “$100 million question we’ve all been asking for the past five years. How do we ensure that the NZ index survives as a standalone sustainable entity without being forcibly merged with another exchange?”

She said while the NZX needed issues, it needed to ensure quality. “In 2015 and 2016 we got some less high-quality issues and some of those get into trouble. It’s quality as well as quantity from my perspective.”

With Restaurant Brands shares being bought up by Finaccess Capital, there were few other opportunities to replace that investment with other growth opportunities, she said.

AMP has signalled plans for a 2019 IPO of its wealth management business, which she said seemed to indicate they needed time to get sorted for a third-party investor.

“We are close to very high valuations at the peak of the market, that’s logically a time for more people to look at an IPO so it’s not only surprising structurally but cyclically. This is the time when M&A activity is at its height and potentially private equity is looking to list businesses they’ve held on to for a while in their portfolios.”

She said a significant hurdle was that New Zealand was made up of a lot of small businesses and large ones that were already listed. There were few mid-sized growth opportunities available.

Frances Sweetman, senior analyst at Milford Asset Management, said liquidity on the NZX was becoming more difficult but a strong local share market was important for New Zealand.

“The lack of new listings and increasing number of takeovers has been exacerbated by growing KiwiSaver flows and the increase in foreign ownership from about 35% in 2013 to over 45% now.

“It is in part a global problem: sovereign wealth and private equity funds have growth exponentially, meanwhile the growth in passive funds and short-selling has increased share price volatility. You can see why taking a company private instead of coming to the share market is an increasingly viable and attractive option.

“t is also in part a local problem, we have a relatively small listed market relative to the size of our economy, a high amount of off market trading and high concentration of broking power. If the NZX was more proactive in addressing these specific issues, in particular the concentration of broking power and lack of IPO’s, it would help.”

Pie Funds founder Mike Taylor said it would be positive to have more regular NZX IPOs.

“I would say that it’s integral to New Zealand financial future that we have an NZX and a well-developed capital market/stock exchange.”

NZX has been looking to encourage listings, to keep the market active with lower listing fees and education for businesspeople about the attraction of listing versus other ways of withdrawing capital from their businesses.

Tags: Milford Asset Management Mint Asset Management NZX pie funds

« FMA back in blackNZX encouraging firms to market »

Special Offers

Comments from our readers

On 30 October 2018 at 7:14 am Pragmatic said:
The logical options for the NZX is to focus on core activities, relinquish its role as Regulator (which is currently comprised by its various activities), partner with a mature offshore exchange for deal flow & stave off the inevitable combined effects of globalization & technology. ...or they could forge ahead on their current course and hope that this strategy remains relevant

Sign In to add your comment



Printable version  


Email to a friend
News Bites
Latest Comments
  • [The Wrap] Soothing words from the minister
    “Apposite commentary from commentary in ifa Bulletin Risk by Adrian Flores - March 22, 2019 Life commissions ‘good...”
    2 days ago by Murray Weatherston
  • Partners pulls ads after mosque tragedy
    “Brilliant adds hopefully they return very soon.To be fair there wouldnt be an add shown that someone couldnt take offence...”
    2 days ago by Brian W Brown
  • Mint axes performance fees
    “Have to laugh and wonder why this wasn't an issue during 5 years as a FMA Board member. Mint appear to have had a reasonable...”
    3 days ago by MPT Heretic
  • Mint axes performance fees
    “Congratulations, Rebecca Thomas and Mint: on the face of it a positive move. Time for FMA to come to the party; and for...”
    3 days ago by Simon H
  • [The Wrap] Soothing words from the minister
    “Completely agree Murray. The insurers have taken the opportunity to kill off the trips, they're costly and a hassle to plan,...”
    3 days ago by JPHale
Subscribe Now

Weekly Wrap

Previous News


Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 4.45 ▼4.49 4.89
ASB Bank Special - 4.05 ▼3.99 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.05 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
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 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 3.99 4.39
HSBC Premier LVR > 80% - - - -
HSBC Special - 3.69 3.95 3.95
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.80 4.94 5.24
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 ▼3.99 4.49
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 - - - -
SBS Bank 5.89 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.05 4.29 4.49
Sovereign 5.90 4.45 ▼4.49 4.89
Sovereign Special - 4.05 ▼3.99 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.29 4.49
The Co-operative Bank - Standard 5.75 4.00 4.79 4.99
TSB Bank 5.80 4.55 4.69 4.99
TSB Special - 4.05 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.05 ▼3.99 4.59
Median 5.89 4.50 4.69 4.84

Last updated: 22 March 2019 10:22am

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