The Australian Securities Exchange is proving attractive to New Zealand technology companies, with the exchange touting a pipeline of 10 looking to list across the ditch in the next year to 18 months.
Blair Harrison, senior manager, listings and issuer services for the ASX in New Zealand, says it is seeing strong interest from businesses, particularly in the technology sector.
"They are looking and interested in raising capital particularly on the ASX because it is a local exchange based in a country not far away with a similar legal system with a far deeper pool of capital than what they can access locally."
Max Cunningham, ASX's executive general manager of listings, says it's the result of the culmination of two strategies. First, running a dual-track listing strategy focused on building a capital markets bridge into the New Zealand market.
And second, a concurrent technology strategy to make the ASX a regional home for mid-cap tech companies.
Xero switched its primary listing to the ASX in 2018 and then de-listed from the NZX. Since then its share price has soared.
Recently, New Zealand business Aroa Biosurgery successfully listed on the ASX and Kiwi buy now, pay later company Laybuy is slated for a listing in the third quarter.
Mobile software engagement business Plexure has also signalled plans to list on the ASX.
Harrison says many of the tech companies already have private capital invested in them, a large chunk of which comes from Australian investors, which means it makes sense for them to go public in Australia too.
While the IPO market effectively slammed shut during March, April and May, Cunningham says it's now back open.
"In the last quarter we were seeing green shoots in the IPO market and we are now seeing growth in the garden."
Technology businesses have benefited in the Covid environment and investors have recognised that, with the US technology exchange the Nasdaq hitting new highs and the S&P 500 also hitting a fresh high this week, driven largely by growth from technology stocks like Facebook, Apple, Alphabet (Google) and Netflix.
Cunningham said it had already been in talks with some of the technology prospects before Covid and they were planning to list in 18 months' time but strong growth had pushed forward their timetable with the need to raise more capital to expand.
What about locally?
A near-drought of listings on local market the NZX in recent years could be about to come to an end.
NZX chief executive Mark Peterson says it is having more contact with possible listing candidates than the exchange has ever seen before.
"I think people are now really beginning to understand the value of having access to capital. The pipeline for us is looking really strong too."
Peterson says the interest it is seeing is not just from the tech sector, although half of its prospects are in that area, but also from agriculture businesses, transport, utilities and aged care.
Not all are wanting to raise capital through an IPO but are also looking favourably at reverse listing options as well.
"The other thing we are seeing too is strong interest in the debt market. As bank borrowing gets harder over the next few years they do want to have a good funding source - the debt market is very effective."
Peterson says the Covid situation is one driver for the rise in interest as businesses have seen companies under pressure able to raise large amounts of capital.
"Covid has created this stark awareness that equity matters, more than debt. When revenue drops away, debt is not the answer."
Peterson says there are advantages for NZ companies to have an NZX listing over the ASX equivalent, or to even go down the dual-listing track.
"To list in NZ is much lower cost when it comes to investment banking. One of the things people don't think about is the insurance cost for directors' obligations - Australia's class action environment means the insurance cost is huge."
Peterson says the interest from companies is there but it really needs the full support of the local investment ecosystem.
Hrdlicka's golden parachute
A2 Milk's former chief executive Jayne Hrdlicka was paid A$3.75 million ($4.1m) for the last five months she worked at the company, its annual report revealed this week.
Hrdlicka finished in the role on December 9 last year in a resignation that was seen as highly controversial at the time.
The report shows she technically remained an employee of the company until June 30 this year, receiving fixed remuneration of A$$1,466,667 covering the period from July 1 to May 31.
She also received other payments to the tune of A$2,285,787, which included her short term incentive, statutory leave entitlements and an additional cash payment.
The annual report shows a2 Milk paid $1.8 million in termination benefits to key management personnel during the last financial year. As the company included only three roles in that, most of the payment is likely to be for Hrdlicka.
Adding up the total remuneration and money she made from cashing in shares during her tenure reveals Hrdlicka got $12.94m for her 17-month stint at the helm of the company - around $760,000 per month.
Not bad work if you can get it. Still it's not as bad as some were expecting, with rumours flying that she had squeezed out close to $20m from a2 Milk at the time of her resignation.
On a high
Medicinal cannabis company Cannasouth received its second share price inquiry from the stock exchange's regulatory arm this week after its shares rose by 32 per cent over just three days.
The share price hit 74c on Wednesday, just shy of its all-time closing high of 76c which the company hit in October last year.
Cannasouth directors say the company is compliant with the listing rules and it is not aware of material information that should be released to the market.
Last September it also received a please explain notice after extremely volatile trading in the stock.
NZX listing rules require firms to promptly release information material to them through the exchange.
They are also obliged to release information if trading in their stock is being materially influenced by false or misleading information that otherwise appears to have come from credible sources.
At the time Cannasouth's legal counsel replied that the company was in compliance.
Perhaps there has been some good news rub off from rival medicinal cannabis firm RuaBioscience announcing it is planning an initial public offer on the NZX.
RuaBioscience, founded in 2016 as a subsidiary of Hikurangi Enterprises, said on Wednesday an IPO was slated for the fourth quarter of this year.
Rua also announced it had been granted a commercial licence by the Ministry of Health to grow and supply cannabis-derived medicines from its new specialist growing and production facilities on the East Coast.
Details of the IPO are expected to be released over the next few weeks.
The global market for medicinal cannabis is forecast to reach $55 billion by 2025.