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It has been another stellar year for New Zealand’s capital markets, with continued strength in capital raising and trading activity; the introduction of a range of market initiatives such as the launch of equity derivatives, a global butter futures contract, new exchange traded funds; and the registration of NXT, NZX’s market for small, high-growth businesses.
The NZX 50 Index is up 16.7% since the beginning of this year, delivering strong returns to investors. Total market capitalisation (equity) to Gross Domestic Product at the end of November 2014 was 41.1% compared to 37.8% at the end of 2013.
Initial Public Offering (IPO) activity during the year resulted in total new capital listed this year to date of $6.6 billion, and there have been more than 165 subsequent capital raising events in 2014 raising more than $1.7 billion for existing listed issuers.
Listings during the year included Genesis Energy, Intueri Education Group, Serko, Gentrack Group, ikeGPS Group, Scales Corporation, Metro Performance Glass, Vista Group International, Pushpay Holdings, EROAD, Lateral Corporation, TruScreen, Orion Health, Enprise Group, Evolve Education and Arvida Group, which listed on the NZX Main Board on Thursday last week.
NZX’s funds management business Smartshares listed two new Exchange Traded Funds (ETFs) last week. The ETFs are the Australian Property Index Trust (ASP), which invests in 16 listed Australian property companies; and the Australian Dividend Index Trust (ASD), which invests in the top 50 high dividend paying Australian listed companies.
In addition, the Financial Markets Authority (FMA) approved the registration and rules for NXT in September 2014, a market designed for small, high growth companies. Earlier this month, NZX reached an agreement in principle with Edison Investment Research for Edison to become the foundation NXT market research provider.
NZX Regulation initiatives
NZX has put in place a number of governance and process initiatives this year to improve both its communication of regulatory decisions and processes, and its arrangements for handling perceived or potential conflicts. This includes:
• Establishment of a Conflicts Committee of the Board to oversee NZX’s arrangements for managing conflicts
• Appointment of Derek Johnston as an independent non-director member and incoming chairman of the Regulatory Governance Committee (RGC) of the Board and expansion of the scope of the RGC’s mandate to include reviewing regulatory policy proposals
In June, NZX welcomed the FMA’s third annual General Obligations Review which concluded that during the 2013 review period NZX complied with all of its statutory obligations.
NZX is continuing to invest to ensure that its markets operate in a fair, orderly and transparent way as trading and listing volumes continue to increase. Year-to-date, NZX Regulation had conducted 192 investigations and enquiries into possible breaches of NZX Rules (121 in relation to issuer compliance and 71 in relation to participant compliance) and reviewed 28 complaints from third parties in relation to issuer and participant compliance. Eighteen matters have been referred to the NZ Markets Disciplinary Tribunal, compared to 9 referred in the 2013 calendar year and 5 in 2012.
