Forum Archive Index - July 2000

["Steve Moxham" <steve@ezysurf.co.nz>]

Moribund, Lethargic, Lacklustre, Obsolescent.

Whatever words you use to describe the NZSE the sentiment is the same.

Our sharemarket is stagnating! Our market took the longest of any to recover from the crash of '87. Some would say it never has. So why is this so?

To try and address the reasons why I've come up with a list of possible problems and potential solutions to kickstart the NZSE into life. 

I'd like to hear your thoughts, ideas, opinions and comments on how the NZSE could be improved/revived. Feel free to elaborate and comment upon the ideas raised below. 

    

Possible Problems:

• NZ is too small. Our population is too thin to support a thriving stockmarket.
• There just isn't the money floating around for investment in the stockmarket.
• We only constitute 0.2% of the world's stockmarkets and are therefore of little interest to the big global players.
• The sharemarket is just a reflection of the state of the economy and so the state of the economy must be addressed before the NZSE can thrive.
• Our geographical location makes it difficult to attract large wealth creating businesses to New Zealand.
• The Government has too tight a reign on monetary policy and a trigger happy approach to adjusting interest rates to control inflation.
• Not enough Government assistance for new businesses and entrepreneurs.
• Not enough investor friendly policies to attract investment e.g. Lack of mkt depth and concerns about insider trading.
• A lack of education about investing on the stockmarket.
• Low public participation compared to the U.S.
• Elephant like memories of the 1987 crash and the perception of the stockmarket as a gamblers den. Naive culture that 'money is evil'.        

Potential Solutions:

• NCM - The NZSE has developed the New Capital Market which I believe is a good start towards addressing the issue of bringing new companies onto the market.
• Begin an active drive approaching companies who have never considered a listing on the market.
• Join the ASX
• Encourage companies to seek a public listing instead of private funding/venture capitalist/ bank.
• Raise the profile of the NZSE in the public psyche as an alternative to putting your money in the bank. 
• Shift the public perception away from 'gambling' to investment. Shift the perception towards the stockmarket being accessible to everyone.
• Run education seminars throughout the country encouraging direct participation and teaching the public the ins and outs of investing on the NZSE.
• Make mkt depth available on the NZSE and tighten our insider trading laws.
• To the Government's credit they have shown inklings of supporting small business but this hasn't gone far enough. They should set aside a fund for entrepreneurs and small business with the same gusto that they spend 33% of the tax take on welfare. I believe you reap what you sow so to create wealth you must nurture the wealth creators.
• Tax incentives to retain and attract business to New Zealand. 
• More grants for research and development.