Macquarie Bank set to grab NZ foothold

By GEOFF SENESCALL

One of Australia's biggest broking houses is poised to set up shop in New Zealand - and others may follow if a transtasman stock exchange is formed.

Macquarie Bank is understood to have had preliminary talks with the New Zealand Stock Exchange, with a view to starting up a broking arm here before the end of the year.

Macquarie has been trawling the market for local talent to build up a team and is believed to have signed at least 10 people.

Company executives declined to comment on the plans, which come as merger talks continue between the New Zealand and Australian exchanges.

However, at the New Zealand Stock Exchange's annual meeting in Auckland on Wednesday, members were told a merger could be a year away.

At the meeting, members were largely supportive of joining forces with Australia and creating one system to trade shares.

Across the Tasman, at least one other broker, BNP Paribis, is keeping a close eye on developments.

Guy Hedley, managing director of BNP Paribis Equities Private in Sydney, said he would definitely be looking at opening an operation in New Zealand if the merger went ahead.

"New Zealand is a very important market. We would see it as a definite opportunity to broaden our business in retail broking to the New Zealand market," he said.

Mr Hedley, who until earlier this year headed the private client arm of JB Were and Son in New Zealand, believed his firm would not be the only one to look at opportunities here.

"There are a number of other firms which aren't currently represented in the New Zealand market, both majors and also a significant number of smaller brokers, who would see it as an opportunity.

"A lot of them would see it as like someone opening up in, say, Melbourne."

The interest in New Zealand flies in the face of a long-held belief that there are already too many brokers here. It also seems inconsistent with a common view that merging exchanges could lead broking firms here to base the bulk of their operation out of Australia.

But the move by Macquarie - which is listed on the ASX and has a market capitalisation of around $6 billion - is thought to involve only an institutional broking business to support its already strong corporate advisory business. In the last three years, Macquarie has been among the top two writers of merger and acquisition business in New Zealand by value.

Campbell Stuart, executive director of equities for UBS Warburg, expected Macquarie would be a force to deal with.

"We all might lose some market share," he said. "But I suppose the market can do with another active player which might create more liquidity."