2021 – Capital Markets: Out of the tailspin

Covid-19 sent capital markets into a tailspin worldwide. But it also provoked a new wave of innovation in New Zealand.

The pandemic provided an unexpected boost to the New Zealand stock exchange —the NZX—as Kiwi companies tapped the market for new equity to keep balance sheets in shape at a time when revenues were severely impacted in some sectors.

The Herald’s 2021 Capital Markets report explores the future for New Zealand capital markets at a time when the rollout of global vaccines and sizeable US stimulus suggests an optimistic future.

Internationally, trends were exacerbated. As Tim McCready writes, they included the push to a green and ethical recovery; increased adoption of technology and the rise of unpredictable retail investors.

Michael Pollard adds the Covid crisis created a catalyst for general reflection, future-proofing and transformation. But says Silvana Schenone, consumers, employees, and investors are demanding more.

The threatened wave of insolvencies and liquidations did not arrive. Confidence —while bumpy at times — was retained with the considerable aid of Finance Minister Grant Robertson’s multibillion dollar 2020 Covid Budget.

The NZX and the ASX each secured a fine run of IPOs. In New Zealand, Kiwi retail investors —with more time on their hands working from home—also discovered the international share market by investing through companies such as Sharesies.

There’s more good news with KiwiSaver changes providing a faster onramp to capital markets.

At a political level, former merchant banker Andrew Bayly reveals National’s (his) thinking about capital markets. Act’s David Seymour laments increasing centralisation of Government power in market matters. The NZ Initiative’s Oliver Hartwich says the Reserve Bank is coming full circle from the time when its independent stance made it the toast of central banks worldwide.

Independent economist Cameron Bagrie and Triple T Consulting’s Sean Keane weigh in on the recent Budget and the management of NZ’s Covid debt monster. Andrea Fox talks with Fonterra’s Peter McBride about the proposed capital restructure.

There’s more besides from players at the forefront of “mum and dad” investing; venture capital and private equity. In this environment there are also new challenges for company directors.

Climate change disclosure is a major issue. And the ongoing Mainzeal case also provides lessons.

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