Several signs point to a possible revival, a corporate partner says
Several trends observed by Chapman Tripp indicate that the equity capital markets of New Zealand are on their way to bouncing back.
In its New Zealand Equity Capital Markets – Trends and Insights report released Thursday, Chapman Tripp said that developments in 2019 paint a brighter future for the markets, including specifically on IPOs, alternative capital markets platforms, and investor engagement.
Corporate partner Rachel Dunne said that there were significant changes to the country’s equity capital markets in both 2018 and 2019, driven by the consolidations of the NZX boards, changes to fees and rules related to on-market trading, the implementation of the new NZX Listing Rules, and the formation and recommendations from the Capital Markets 2029 industry-led body.
One particular highlight of the markets last year was the Napier Port IPO, Dunne said. Chapman Tripp, as well as Bell Gully and Simpson Grierson, advised on the deal.
“Despite moderate projections for markers such as IPO activity, a sure sign of NZX’s better bill of health this year was found in the banner listing, the Napier Port IPO, which we understand received strong Australian institutional investor demand in spite of opting not to dual list on the ASX. This indicates a confidence in the NZX not seen in previous years,” Dunne said.
Another bright spot in the markets pointing to a revival is the increased use of alternative capital markets platforms and innovative services, boosting market participation from smaller investors. Chapman Tripp said that examples of these platforms are SharemeUp and Shareshies, as well as the plan trading platform from MyCap.
Dunne also pointed to the improved efforts of New Zealand companies to engage with investors.
“New Zealand has previously lagged in this area compared to larger and more mature markets, so this is certainly a step in the right direction. There are many benefits of this, from protecting companies against hostile takeovers, to reducing combative-style shareholder activism, which is on the rise, particularly offshore,” she said.