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The Business Herald’s markets and banking reporter.

NZX reveals details of new NXT market

Invivo Wines could be one of the NZ companies to consider raising capital on the NXT market. Photo / Dean Purcell
Invivo Wines could be one of the NZ companies to consider raising capital on the NXT market. Photo / Dean Purcell

Stock exchange operator NZX has announced the branding of its soon-to-launch new market -- aimed at small, fast-growing firms - and also revealed the names of a number of companies considering listing on the new board.

The market, which is expected to launch in the fourth quarter of this year and will eventually replace the NZAX alternative exchange, will be called NXT (pronounced "next').

NZX chief executive Tim Bennett said companies considering raising capital through listing on the NXT included technology developers Straker Translations, Fronde and Booktrack, as well as Auckland wine firm Invivo Wines.

He said NZX had talked to around 100 businesses as it developed the new market, which is aimed at firms in the $10 million to $100 million market capitalisation range.

"They helped us design a market that would work for them," Bennett said.

"Will they all list? No. But will some of them list? Sure."

At least two listings would take place on the NXT at the time its launch, he said, although he was not sure which companies they would be.

NZX said the timing of the launch depended on when the new market received final approval from the Financial Markets Authority and firms being ready to list.

"Many businesses operating in New Zealand need additional capital for growth," said Bennett. "Currently it's time consuming for them to find capital, and can be a drain on their limited resources. Inability to raise low cost capital hampers their growth and ultimately New Zealand's economic prosperity. That's the problem the NXT market will address."

The NXT will have a new, looser disclosure regime than the main board. Companies will be required to file quarterly updates rather than the usual continuous disclosure requirement.

And instead of a full prospectus, companies will only have to prepare a listing document that will include projections against key operating milestones but no financial forecasts.

NZX will also appoint a research provider for the new market, which will provide independent analysis to investors on NXT-listed businesses.

"In addition to regular financial reporting, a key feature of disclosure on the NXT market will be quarterly reporting of the underlying drivers of business performance or key operating milestones," NZX said.

The new market will have a separate website to the main NZX site and prospective investors will have to certify they have read and accepted a risk warning before investing.

"We don't want investors to put all their eggs in one of these baskets," said Bennett.

- NZ Herald

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