The dearth of listings on the NZX has long been a bug bear for the local investment community, so fund managers welcomed the announcement that the NZX and the FMA will be looking deeply into the reasons for that.
The total market value of companies listed on the share market represented 47 per cent of GDP last year. That was up one per cent on the previous year, despite a number of companies - including the market leader Xero - leaving.
But the proportion the sharemarket relative to GDP relative to other markets remains paltry.
In Australia, the figure is 90 per cent, 116 per cent in Canada, 130 per cent in the United Kingdom and 144 per cent in the United States.
That's something the NZX and the Financial Markets Authority (FMA) will have top of mind when they look at ways of injecting life back into a share market that has struggled to attract new listings in recent years.
The review will be chaired by capital markets veteran Martin Stearne.
Matt Goodson, managing director at Salt Funds, said it was a review was a worthy exercise to go through, particularly given the low proportion of the market relative to GDP.
"Going through the reasons for that, and to find out what, if anything, can be done to change that, would certainly be worthwhile," he said.
"Relative tax on different asset classes could be one thing, and the lack of a major bank listed bank here is probably another," he said.
Results of the review are due out in the third quarter of this year.