Local authorities should look at selling assets – NZX boss
Now parliament has passed the mixed ownership legislation, the NZX CEO wants local authorities to look at assets that could be sold the same way.
Speaking at the weekend on TV3’s The Nation programme, NZX boss Tim Bennett said he was going to work to provide New Zealanders more opportunities to invest than just power companies.
"There are some other sectors of the economy, those assets that are in public ownership, particularly by local authorities where we need to think reasonably creatively about how New Zealanders can share in the ownership of those assets while still maintaining control," Mr Bennett said.
He said Christchurch airport was an example of what he was talking about.
“I think the mixed ownership model provides a good template of how these things should be done.
“You look at the Ports of Tauranga as another example where local authority maintains a major stake in these assets, and also allows New Zealanders to invest alongside the local authorities in parts of our infrastructure.
Mr Bennett said he had not yet talked to local authorities about his proposal.
Instead, in the two months he had been in the job he had been concentrating on talking to fund managers and brokers.
“There's tremendous support for the New Zealand capital markets, but there's a clear demand for different types of investment opportunities for New Zealanders to invest in the market.
“And one of the things we need to work on is across that range of different opportunities.”
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Comments and questions8
I look forward to the swimming pools, stadiums, parks & reserves, arts & heritage, information centre, council buildings and libraries being privatised.
But am not holding my breath that the investors will come forward when so much rate payer money is required to fund the extravagant facilities of the Gore District Council (Population 12,300).
What glass of wine did that cr*p come out of?
POAL use to be great under mixed ownership. Auckland City took it back over 100% and now look at it compared to POT (which is mixed ownership).
Mixed ownership has it's benefits, if only to ensure that Business people, not politians are in control.
NZX was so happy to promote the listings of finance companies' securities but when it came to ensuring that they met continuous disclosure requirements, Mr Weldon and his subservient staff were too busy counting the money from the listing fees, fines etc. Not a cent or tear spent on protecting investors.
What has changed at the NZX?
Mr Bennett is living up to his predecessor's reputation as a watch-watcher.
Great idea Tim. Shame you haven't been down here in christchurch talking to Bob and his loonies about it, bc it looks like they just put rates up whic probably means no asset sales. Talking to Bob would probably have been a lot more effective than talking at him via television. Nothing more certain to p**s him off
Sounds like a good idea provided -
1 control is maintained by the local body,and
2 funds derived are spent on the right projects.
Liberte
TIm Bennett needs to concentrate for a while on making the NZX attractive to private companies to list on it, and then and only then, and once the market has some life in it, consider this harder task, Local government politicians won't move on this for sometime and it shouldn't be a priority. It is unfortunately as ill conceived as Weldon's focus on Agricultural companies, futures, the NZAX, and other wastes of time.
I strongly suggest that Tim Bennett looks at the regulation of the last few years, where NZ has followed the global trends, which globally has almost killed capital markets for the private sector companies seeking capital. There needs to be a clean sheet of paper approach and perhaps a counter cyclical approach.
This would see a number of issues approached / considered:
1. The separation of asset management within stockbroking firms from stockbroking and investment advisory - currently the rules of portfolio management in the asset management area restricts the support the support for capital raisings in all but the few very large companies;
2. Look at the concentration of ownership and control among NZX firms - creating too few counterparties to ensure liquidity, and not enought counterparties to ensure opposing views / diversity of views and different approaches on stocks;
3. Look at a five year no NZX fees inducement for companies listing on the NZX;
4. Get rid of the continuious disclosure regime - a major turn off which is being enforced to the detriment of companies and their shareholders by regulators, and which is meaning few directors are willing to take on positions on boards of companies unless they are very huge and have significant corporate infrastructure (including large legal departments), rather than small companies. The continuious disclosure regime also means that there is a growing number of companies forced down the spiral of doom - rather than having time to fix problems (often outside of their immediate control, and requiring time to fix;
5. Organising NZX with a help desk mentality (get rid of the current telephone system which is hardly user friendly) and have three or four humans able to help or ensure that you can get timelyappropriate help;
6. Open the market for longer hours - overlapping with more overseas markets, in particular open at 8am so it is open when the US is open;
7. Get more participant firms - including some with a small company focus.
Excellent suggestions.
Also highlights how Mr Weldon screwed NZ to profit himself and his sponsors.
All that unregulated monopoly profits through excessive charging and he hardly put a cent back into building up the NZX itself as an exchange - low staff morale and lousy non-existent service.