As predicted in last year's publication, 2018 was a transitional year. With intial public offering (IPO) activity extremely subdued and a decline in the number of issuers on the NZX Main Board for a further consecutive year, it was undoubtedly a sluggish year for New Zealand's equity capital markets. However, on a more positive note the NZX continued to outperform other global indices.
Key insights and predictions include:
- Significant changes undertaken in 2018, including equity board consolidation, changes to fees and rules around on market trading and the new NZX Listing Rules, will have a positive flow-on effect in the next two years and beyond.
- After only one IPO in 2017, and a grand total of zero IPOs in 2018, the work that has gone on to improve the markets will translate into more IPOs in 2019 and 2020.
- The number of issuers on the NZX Main Board will decrease once again – but for the last consecutive year.
- The use of AREOs – a type of rights offer that enables the accelerated receipt of proceeds from institutional investors – will continue, particularly by larger issuers. The use of share purchase plans (SPP) will decline, in part due to the changes in the NZX Listing Rules.