Chapman Tripp sees subdued NZ equity capital markets
Chapman Tripp's latest annual Equity Capital Markets report says the drop in the number of NZX Main Board issuers experienced in 2016 seems likely to continue in 2017.
Partner Rachel Dunne says the decline reflects a number of factors, including delistings, often as a result of takeovers.
She says on the other side of the ledger, there were only three new IPOs on the NZX Main Board – Tegel, Investore Property and New Zealand King Salmon. A number of companies chose to bypass the NZX in 2016 in favour of private sales or listing on an overseas exchange, in particular the ASX.
"We expect a similar number of IPOs this year, which is disappointing in relation both to the much stronger relative performance of the ASX in attracting new listings over 2015 and 2016 and to NZX’s success in doing the same through 2013 and 2014."
The report identifies a number of lead trends:
- IPO outlook disappointingly in line with the "new normal"
- Continued innovation in capital raising structures.
- Strong secondary capital raising volumes.
- A continuing focus from the NZX and the Financial Markets Authority on secondary market activities, regulatory change and issuer inquiries.
Rumoured 2017 IPOs and listings include Hirepool, Oceania Healthcare (a perennial listing candidate), Dairy Farms NZ, the UK’s Arria NLG and Complectus (which came close to listing in 2016 but is now tipped to pursue an M&A exit instead).
Ms Dunne says on a more positive note, Chapman Tripp expects that the comparative strength of the New Zealand economy, the quality of our capital markets regulatory framework and the continuing low interest rate environment will ensure that the NZX remains an attractive investment option and that the significant secondary capital raising activity seen in 2016 will be maintained.
Last updated on the 16th February 2017