IPO struggle expected for NZX this year

  • 18/01/2016

By Sophie Boot

New Zealand's share market is expected to struggle for new initial public offerings in 2016 without the impetus of a privatisation programme, which is whetting appetites across the Tasman.

There were six new listings on the NZX in 2015, including two compliance listings, down from 12 main board IPOs and four compliance listings on the NZAX junior market a year earlier when the government's partial privatisation programme was completed with the listing of Genesis Energy.

Over the same period, Australia's ASX rolled out 77 new listings, up from 71 in 2014, and Harbour Asset Management managing director Andrew Bascand expects to see more opportunities across the Tasman this year with a greater number of companies ripe for listing.

"Even proportionally, it seems there is a deeper pool of companies owned by private equity for a start; some are startups and others are turnaround situations," Bascand said.

"In addition, the government sector in Australia has been very active in considering privatisation opportunities. The privatisation process in Australia is alive and well, whereas in New Zealand we seem to have hit the wall."

Several companies last year signalled intentions to list on the NZX, but when global equity markets went through a turbulent period during the middle of the year, vendors' appetite to go public dimmed.

With 2016 underway, some of those firms that tried their luck earlier are thought to be considering a second attempt, including Tegel Foods, Hirepool and Carter Holt Harvey.

Mediaworks has been touted as another potential listing candidate, though an investor said the market should "definitely be very dubious" about a Mediaworks IPO as the company has a number of issues to work through.

A smaller company likely to come to market this year is technology incubator Powerhouse, which is raising $15 million of new capital over the next six months as a precursor to a planned IPO and dual listing on the NZX and ASX in July/August.