It's worthwhile asking why anyone - aside from a few bankers and brokers in and around Queen St - should be interested, let alone excited, about the sharemarket.
The simple answer is that the sharemarket provides the capital required to build great New Zealand businesses.
Businesses that create jobs, businesses that are innovative, businesses that are competitive in our biggest market, Asia, businesses we are proud of, and businesses that we are understandably very upset about when they are sold to foreigners.
As a country we have not invested as much as we should have in our businesses.
We've invested less in infrastructure - machinery, equipment, computers, and so on - compared to other developed countries. As a result, New Zealand's productivity is low.
A larger, more active sharemarket will provide lower cost of capital for companies to grow and to invest in infrastructure, which will ultimately improve our competitiveness and standard of living.
While it is easy when interest rates are at historic lows to say banks can fund our businesses, bank funding is only a partial solution and longer-term, as interest rates rise, that's not a viable option.
When I arrived back in New Zealand nearly a year ago, I was excited by the outlook for our country's capital markets. Nine months in, and post the summer holiday break, it's a good opportunity to reflect on what happened and what we still need to get done.
Fortunately we are off to a good start. The past six months have been a standout for the sharemarket with the NZX50 up by 24 per cent last year.
Investors have recognised the attractiveness of investing in New Zealand listed companies, and reallocated their portfolios from overseas back to New Zealand.
The demand for new issues, and the sale of stakes by large shareholders, has outstripped even the most optimistic expectations.
This week's sale of 7.6 per cent in Auckland International Airport is the latest example. More importantly, New Zealanders are starting to invest more, especially through KiwiSaver, which last year grew by 33 per cent to $13.8 billion.
Achieving what we need to will take time and requires a concerted effort. The sharemarket, relative to the size of our economy, remains small. While we are seeing more companies wanting to list this year, we have a long way to go.
Some of our best companies haven't yet been inspired to see the benefits of listing (something NZX is working on) and would rather remain private, until most likely, they are sold offshore. While there are listings in the pipeline, demand far outstrips supply.
We simply don't have enough products on our shelves at NZX.
Obviously as a small, proud country, we would rather invest here than overseas. But with a lack of product to invest in, that's not what is happening at the moment.
New Zealanders are putting money into KiwiSaver, but of that money, only 10 per cent as at the end of September last year, was invested in shares of New Zealand companies. A staggering 50 per cent is invested in companies overseas.
In contrast, most of our borrowing comes from overseas, $253 billion, or 121 per cent of GDP at the end of 2012. So as a nation, we're busy investing in other countries while borrowing heavily from them as well, which does not make a lot of sense.
That's one of the reasons the Government's share offer programme is critical for the development of our capital markets.
The programme has the potential to increase the size of our share market by up to 10 per cent. And we know, from market research and from the demand we saw last year, that New Zealanders are looking forward to investing in Mighty River Power, Meridian Energy and Genesis Energy.
In addition to providing more opportunities for New Zealanders to invest in the country, there are three other reasons the Government's share offer programme is critical for the development of the capital markets.
Providing more opportunities to invest in shares not only benefits investors through a return on their investment, but more broadly, it increases financial literacy.
In Australia, a combination of the introduction of compulsory superannuation and the partial sale of state-owned assets almost 20 years ago significantly increased the public's understanding of the benefits of saving, and the range of investment options available.
Secondly, companies with a combination of public and private ownership, as the Port of Tauranga has shown, generally perform better for their shareholders, customers and other stakeholders than if they were solely state-owned.
They have the capital flexibility they need to grow their businesses, have a board and management team accountable to a broad range of shareholders, and ultimately they provide better returns for the Government (or in the case of the Port of Tauranga, the local authority) and their other investors.
Finally, the programme will encourage other private companies to list on the stock exchange both directly and indirectly, by supporting the development of a larger, more active share market.
For some of these companies, the additional capital they raise will enable them to grow faster, benefiting their shareholders and our economy.
While critical, the Government's share offer programme is only one part of what's required to develop a more attractive and effective capital market. At NZX, we recognise that working closely with all parts of the market is critical to ensure success - with brokers and fund managers on improving the range of investment opportunities, with private companies to encourage them to list and with listed companies, particularly smaller ones, to ensure they effectively communicate their story to investors.
We are also working with the FMA, to continue to enhance and promote the quality of our marketplace for the benefit of investors and other market participants.
Over the past year we have begun to work much more closely with the industry and invested in our business to ensure we can capture the opportunities ahead.
We must accelerate the development of New Zealand's capital markets, for the benefit of all.
The Government's partial share offers are a critical part of what is required. Unfortunately, without the partial listings of those businesses, we'll continue to save and invest overseas. We'll continue to build great companies, but we'll continue to be frustrated when they are sold to private equity or foreign investors when they need the capital to grow.
*Brian Gaynor's column will be back next week.By Tim Bennett