Trans-Tasman stock exchange rift deepens

By Phil Boeyen, ShareChat Business News Editor

Friday 12th April 2002

The already strained relationship between the New Zealand Stock Exchange and its big Australian brother continues to cool following the ASX's decision to go ahead with changes to foreign exempt listing rules.

Changes to the rules are forcing a number of dual listed New Zealand companies to seek a full listing on the ASX at extra cost because they will not meet the new thresholds for foreign exempt status.

Those new thresholds require that the company has either A$2 billion in net tangible assets or can show annual operating profits of at least A$200 million for each of the past three years.

The NZSE has made submissions against the changes but its concerns appear to have fallen on deaf ears.

"The ASX announced on Wednesday that it is to proceed with the amendments to its listing rules recorded in its exposure draft of 31 January," the NZSE says.

"ASX has stated that it has decided on these changes after "extensive consultation". However, ASX has not consulted with the NZSE nor, other than in relation to implementation of its policy, with the companies affected."

In its second submission on the changes in March the NZSE concluded "it is the firm view of NZSE that none of the reasons advanced by ASX provide any credible justification for the proposed changes."

"ASX may well have a reason for the changes it proposes. However, that reason has not yet been publicly stated by ASX.

"In these circumstances, ASX should not proceed with the proposals set out in the ASX Draft, and, if it does seek to proceed, ASIC and the Minister should exercise their discretion to decline approval to those proposals."

In its second submission the NZSE notes that if the same minimum size requirements for foreign exempt status were applied for admission to "full" ASX listing, only around 40 of the approximately 1,300 companies presently listed on the ASX would qualify.

The NZSE has decided to make details of its submissions public after a lack of response from the ASX.

"As it is not clear now whether ASX intends to respond to the submissions received, we are providing a copy of the NZSE submissions on our website so that interested parties may judge for themselves the merits of the ASX decision."

The latest New Zealand companies to announce they will seek a full ASX listing are Fletcher Challenge Forests, Fletcher Building and Nuplex. New Zealand companies make up around half of the number of foreign exempt companies on the ASX. Only Telecom and Carter Holt Harvey meet the new, tougher criteria.

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