Forum Archive Index - July 2000

[Adrian Leach <adrian_leach@dmcwave.com>]

Well said Steve, In particular the idea about R&D and helping small
businesses.  The problem is there is little incentive for NZ business to
carry out R&D, blame the tax laws for that.  Being a young entrepreneur
myself I have found that the government are willing to support you to sit on
your but all day ie: dole.  They said if I stay on the dole for 6 months
they will give me an allowance to start a business.  Why don't they give an
incentive to start one straight away.  So now instead of starting a business
and develop my existing one, I have had to sell up and get a job.  It is
frustrating being an entrepreneur and working for someone else.
 
 

-----Original Message-----
From: Steve Moxham [mailto:steve@ezysurf.co.nz]
Sent: Tuesday, 18 July 2000 11:41
To: sharechat@sharechat.co.nz
Subject: [sharechat] How to kickstart our market


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.         


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