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Outperforming NZX needs to lift its global profile, CEO Peterson says

Thursday 13th September 2018

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NZX chief executive Mark Peterson says the exchange can't rely solely on its record-breaking performance this year to build its international profile. 

The benchmark S&P/NZX 50 index hit a record in late August and has gained 9.5 percent so far this year, compared to an 8.1 percent increase on the S&P 500 in the US and a 1.3 percent increase on the S&P/ASX 200. The UK's FTSE 100, Hong Kong's Hang Seng and Japan's Topix have all posted declines. 

The benchmark index's 4.4 percent gain in August was the best for a reporting season in 18 years. However, Fisher Funds Management portfolio manager Sam Dickie said that wasn't justified given analysts downgraded future earnings by 2 percent. 

"A number of companies were slightly ahead of their revenue targets, however, higher costs meant that some fell just short of their earnings forecasts," Dickie said in September update by NZX-listed Kingfish. 

The stock market operator yesterday announced a new memorandum of understanding with Nasdaq to investigate ways to develop closer links with the tech-heavy bourse operator, adding to similar deals it has made with exchanges in Hong Kong and Singapore. 

Speaking from New York, Peterson said the previous government's partial privatisation programme, known as the mixed ownership model, boosted New Zealand's international profile. But he said the local investment community knows more can be done. 

"We would probably all say there's more to do to create wider awareness of our market," Peterson told BusinessDesk. "We've had a lot of good performances from some very good companies in a stable jurisdiction. Those sorts of returns are highly sought after by investment managers - one of growth as well as yield."

International investors are often impressed by the domestic market, its governance and legislative and regulatory settings, but need time to understand it, he said. 

Peterson said he met with Nasdaq's chief executive and president and several senior executives who showed enthusiasm on several fronts. 

The stock market operators will initially examine ways to promote dual listings, depository receipts, exchange-traded funds and broader ways to develop market initiatives. That includes expanding an existing technology relationship beyond NZX's use of Nasdaq's X-stream platform. 

"We'll start with a few things to see where value might be created and see where that might go," he said. Nasdaq executives were interested in NZX's expanding suite of green bonds and the technology element of the MoU could see New Zealand used for early deployments of new services, he said. 

(BusinessDesk)

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