KEY POINTS:
Sharemarket operator New Zealand Exchange is pumping more resources into its sluggish NZAX alternative market and enlisting the help of successful issuers in a bid to boost new listings.
NZX recently completed a review of the three-year-old market, prompted by the slow pace at which it has been
adding companies. The market began with 10 issuers and now has 29.
"It certainly would have been our expectation that there would have been more," NZX head of markets Geoff Brown said yesterday.
Nevertheless, for those firms that had listed, the market had worked well in terms of capital raised via initial public offers (IPOs) and secondary capital raisings and trading activity.
To address the dearth of new listings NZX is to do more to identify and develop IPO prospects.
Brown, who previously had sole responsibility in NZX's "pre-market services" operation, has been joined by senior NZX staffers Damas Partois and Sara Valasquez.
Their work will include improving the effectiveness of the network of NZAX sponsors, whose role is to work as advising brokers to assist companies to come to market.
The sponsor network had worked "reasonably well", said Brown, but that was down to a small number of enthusiastic individuals such as sharebroker and NZAX board member Colin Giffney, who was responsible for three of the NZAX's IPOs.
"We've got to get a broader range of those types of individuals or organisations in the conversation."
Brown said NZX was also working to demystify the listing process.
"There is the view out there that there's a lot more work to be done, that there's a lot more compliance requirements ... The other aspect is there's a whole lot of things with regard to listing which are in the realms of the unknown, so it's really about breaking down that fear over time."
The NZX is now using case studies to illustrate what companies have been able to achieve.
"What we are doing now is to get companies themselves to speak about what their experiences are.
"We've had presentations from Tony Falkenstein at Just Water, from Matthew Washington at Pumpkin Patch and we're doing one with David Ware from TeamTalk shortly. That gets people more engaged when they hear, 'This is my experience, this is what you have to look out for'."
The review also found that the profile of NZAX-listed companies was not as great as had been hoped. NZX is to run a series of seminars early next year for investors to raise the profile of companies on the index.
NZAX
* Started with 10 companies, now has 29.
* Has a total market cap of $529 million.
* Has had eight initial public offers, which have raised a total of $51.3m.
* Its 16 secondary fund raisings have raised a total of $103m,
* Turnover since inception has been 20,000 trades worth $151m.
* Three NZAX companies, Smiths City, Seeka Kiwifruit Industries and Comvita, have moved to the NZX main board.
