New stock exchange broom looks to stir up investor interest

By NZPA

Thursday 6th June 2002

The new head of New Zealand's stock exchange has vowed to look hard at the sharemarket's historical lack of listings as part of a review he will conduct over coming months.

Stressing that he was still at the fact-finding stage, new chief executive Mark Weldon deferred comment on perceptions that the New Zealand Stock Exchange was struggling with performance and public confidence issues.

But the former New York business adviser did tell journalists he had not detected an impression that New Zealand was a Wild West market.

"There's two things that matter: there's the content of the market and the perception of the market. I think the content and the structure of the regulatory framework and the rules (are) sound, and I think it becoming very close to best in class.

"I think we do have a lot of work to do nationally and also internationally in getting that story out."

Mr Weldon said he felt the New Zealand market was well run, "extraordinarily efficient and low cost in global terms".

However, there was a need to educate the public and companies on the benefits of getting into the sharemarket.

"There's been a minimal net increase in listings over the last 10 years and no, I don't have a quantified goal but I will certainly be tracking that number very, very closely."

One area he hinted he would be targeting was the traditionally private agricultural sector. There was considerable overseas interest in investing in that sector, he said.

Individual investors also tended to hold "relatively inefficiently constructed portfolios of cash and property and don't create as much wealth for themselves as they could".

Mr Weldon said he would be spending the next three months drawing up a strategy for the stock exchange which included the structure of its markets. He declined to comment on the New Capital Market, which has been largely shunned as a helping hand to small companies seeking the critical mass to list.

Market commentators who have been critical of the NZSE's performance have praised Mr Weldon's selection as an inspired choice.

"The arrival of this guy Mark Weldon is the best thing that's happened in a long time," said newspaper columnist Brian Gaynor.

Mr Weldon, a former Olympic swimmer for New Zealand, has been in the United States for the last eight years after winning a scholarship to Columbia University to study international law and economics.

He returned briefly to Auckland University as an economics lecturer before heading back to New York to work as a corporate finance attorney and more recently for McKinsey and Co as a business adviser specialising in business strategy and problem solving.

Mr Weldon made it clear it was the job he had returned to New Zealand for, and not the lifestyle or the country's relative safety.

Asked if September 11 was a factor in his return, he said: "The reverse. I had some close friends die and started to feel pretty patriotic towards New York. It was a hard decision."

Mr Weldon said he had been working "mid-town" at the time of the attacks, but lived in downtown New York, in the vicinity of the World Trade Centre.

He said he had enjoyed the stimulation of New York and felt its markets were the best in the world.

But he had some complimentary words for the country he was returning to.

"My sense, in coming back, is that New Zealand companies and New Zealand as a country ... are very efficient, low cost, well run and I think their challenges are the same as the exchange, which is to innovate and grow."

With the 1987 sharemarket crash still in people's minds, and a new Securities Bill before Parliament, Mr Weldon said he would be following the same disclosure principles he observed in the US -- that " sunlight is the best disinfectant".

He generally felt the new Securities Bill would "go a long way" to improving confidence.

But he agreed it could not be left to just the Government and indicated he would not be averse to getting companies on the phone.

"New Zealand's a small place and one of the big plusses of that is it's reasonably easy to speak to the right people reasonably quickly ... I think co-operation is what it's all about in terms of correctly structuring the capital markets and regulations that surround them."

There were also some "holes" in the stock exchange's set of instruments for getting all parts of the investment community involved.

"For example, if some insurance companies are regulatorily precluded from investing in certain asset classes, and taking certain strategic approaches and currency risks, there might be ways of addressing that."

With so much going on, the stock exchange -- which is planning to demutualise -- would probably not put a vote to its member shareholders before July, Mr Weldon said.

Comments from our readers

No comments yet