Regional companies strong enough for public float

ONE of the lead executives at the company responsible for running the New Zealand Stock Exchange believes regional provinces like Gisborne are harbouring a “surprising number” of companies contemplating a public float.

Speaking to The Gisborne Herald ahead of an address to 100 people at the Quality Hotel Emerald on Tuesday, NZX Limited head of markets Mark Peterson said he would be using his address to speak about NZX as a company as well as capital markets in general.

“Specifically, if a company wanted to go public, what would their options be? And to give people a good sense of what the possibilities are.

“We make a point of speaking to the regions, because what we are seeing is we’re not so much talking to the investors, it’s the brokers who talk to investors, we are trying to talk to the companies.

“There are a surprising number of very good businesses in the regions in New Zealand and we are trying to create some awareness of what the markets offer and how it hangs together.

“From a pipeline point-of-view, we are actually in a pretty good space at the moment. New Zealand is doing pretty good.

“We are a long way away from some of the disruption around the world and the opportunities for New Zealand businesses are strong. On the back of that, some are seeking more capital and therefore will at the public markets.

The pipeline for public debt and securities was also very strong too. Mr Peterson said success would not be measured by the emergence of a New Zealand tech giant taking up the mantle of “the next big thing”.

“What we want to see is a really positive environment for companies to fulfil growth and we want the market to be full of a diverse range of businesses that represent New Zealand. Clearly, you want a good mix of industrial, agricultural, innovative and infrastructural companies, with a good mix of growth and opportunistic, stable yield-generating businesses.

“That will be a market that people will want to invest in. The fad thing is something that personally, I would prefer not to see.”

The was a real opportunity for the New Zealand market to grow.

Although the markets bounced back quickly from the unexpected announcement that Britain had voted to leave the European Union, people would need to watch where the Brexit went from here.

“No doubt people will be keeping a very close eye on just how the exit actually unfolds but I guess it’s probably in everyone’s interest it is managed well, and telegraphed well. Nobody really wants the markets to react like that again.”

NZX Limited builds and operates capital, risk and commodity markets and the infrastructure required to support them. It also provides information, data and tools to support business decision making. NZX is the only registered securities exchange in New Zealand, and is also an authorised futures exchange.