JUNO INVESTING ©

TIM BENNETT

JUNO INVESTING ©
TIM BENNETT

 

SUMMER 2015

CEO of NZX, which builds and operates capital, risk and commodity markets and the infrastructure required to support them.

What attracted you to the CEO position at NZX?

I was living in Asia when the opportunity to lead NZX came up. I was really inspired by the personal and professional challenge of being a leader in New Zealand. I wanted to directly contribute to growth in our capital markets, on behalf of all New Zealanders.

We’ve had an outstanding five years in the markets thanks to a stable, growing economy and a significant market development programme. It’s been exciting to be a part of that for the past three and a half years that I’ve been CEO at NZX. 

There has been critical progress in our capital markets since the Capital Market Development Taskforce in 2009. This includes the introduction of KiwiSaver; the execution of the Government’s share-offer programme, which saw significant power assets partially NZX-listed; and, more recently, the introduction of the Financial Markets Conduct Act.

But our markets still remain relatively underdeveloped. In some ways we are not even at the halfway line yet, which means there are significant growth opportunities that we need to seriously focus on.

What are your ambitions as CEO of NZX? 

To lead a growing business that creates opportunities for employees and provides good returns to shareholders. NZX is a major player in a small market, and I’m focused on leading a team that engages with all of our stakeholders — listed companies, brokers, the Government and the general public and so on — to lead growth in our markets.

New Zealand has around 180 listed companies. Why is it we have so few in comparison to other developed countries?

Good question. Our share market, relative to the size of the economy, remains small. Generally speaking there are two reasons for this. 

Firstly, agriculture, the largest part of the New Zealand economy, has traditionally been based on cooperative or family ownership. And globally, land hasn’t been viewed as a strong listed asset. 

Secondly, the lack of depth in our market historically is because large assets have been owned offshore. Take the financial services industry for example: four of New Zealand’s largest banks are Australian-owned, with only two listed in New Zealand.

We are working to change this by providing more opportunities for New Zealanders to invest. We’re educating private companies on the benefits of listing here, instead of considering selling offshore. We’re also launching more ‘products on the shelves’ for investors, such as the range of Exchange Traded Funds through our Smartshares business. 

In your view, what are the benefits of being a listed company?

Listing provides New Zealand businesses with capital to grow. This ultimately increases the competitiveness of our economy, and puts discipline in place for management to run transparent companies that create jobs. It gives employees and investors the chance to see how a company is performing through the share price. They can also participate in its ownership. 

How is NZX involved in improving the financial literacy of New Zealanders and encouraging Kiwis to buy shares?

We work on a range of projects that contribute to improving financial literacy. 

For example, as part of Money Week, NZX and the Commission for Financial Capability launched Invested, a series of short online videos that educate people interested in investing but unsure where to begin. Topics include the basics of KiwiSaver, managed funds, fixed interest, and investing in the share market. We also look at what the risks of investing are.

We are also contributing to the review of legislation applicable to financial advisers. We support outcomes that make it easier for New Zealanders to get appropriate advice. We want to reduce complexity, allow different advisory models and distinguish between sales and advice. We made a submission to the Ministry of Business, Innovation and Employment on these proposed changes earlier this year, and await the outcome with interest.

What good finance book have you read recently?

It’s not strictly finance, but The Innovator’s Dilemma by Clayton M. Christensen is a good reminder to companies to keep looking ahead, and not to get caught up in traditional processes. Companies and their internal processes have to evolve alongside technology.