NZX chief welcomes NZME listing

NZME's Chief Executive Michael Boggs and Carol Campbell 'ring the bell' as NZME lists on the NZX in the wake of Brexit. Photo / Greg Bowker

NZX chief executive Tim Bennett expects the financial markets to remain volatile over the next few weeks in the aftermath of Britain's surprise decision to leave the European Union.

Britain's Prime Minister David Cameron - a proponent of the "remain" campaign - said he would step down by October after the vote was defeated by 52 per cent to 48 per cent late last week.

Around US$2 trillion was erased from the value of global sharemarkets on Friday in response to Britain's planned exit. The benchmark fell NZX-50 index fell sharply on Friday and dropped by 1.1 per cent this morning.

"It was obviously an unexpected outcome and markets don't respond well to uncertainty, so I would expect to see some volatility in global markets over the next few weeks," Bennett said.

"But this is essentially a political negotiation that will be played out over the next six months until there is a new Conservative leader, and then it will be two years before the UK negotiates its exit," he said.

"So I think that once the position becomes clear, from at least the New Zealand market's perspective, it won't have a lot of impact," he said.

Some commentators have said Britain's exit would result in a slowdown in world economic growth but Bennett said that that would depend on the form of the exit "and that's completely unknown at the moment".

The meltdown on world markets has coincided with the listing of New Zealand media company - NZME - on the NZX and Bennett said he expected trade in the stock to be volatile at first.

"It's great for the market to have another local business listed on the NZX, but also it was well-received by domestic institutions, I understand," Bennett said. "It goes to show that in our market that these sorts of spinouts from Australia are very well received," he said.

"It's listing at a time when there will obviously be some volatility in the market, and - given the nature of carvouts and spinouts - expect to see some changes in the share register over the next few weeks and fund managers to rebalance their portfolios," he said.

"So it will take some time to settle down I would imagine, given those two things, but it is exciting to see NZME listing," he said.

Shares in NZME - publisher of the New Zealand Herald - traded at 85c per share on their debut on the NZX.

NZME split from the parent company APN News and Media after shareholders voted in favour of a demerger plan earlier this month.

Chief executive Michael Boggs said NZME had undergone a substantial transformation process over the past 18 months, with the integration of the company's publishing, radio and digital assets.

"With a new, standalone structure in place, NZME is now well positioned to take advantage of a number of emerging opportunities in digital, data and online media and developing new revenue streams through video, events and experiential," Boggs said.

NZME has initially targeted a dividend payout ratio of 60-80 per cent of its underlying net profit after tax.

NZME chairman Sir John Anderson said NZME is a leading integrated media and entertainment business in New Zealand, operating some of the country's most recognisable publishing, radio and digital brands.

NZME owns the Herald and nzherald.co.nz as well as radio stations, and the e-commerce site GrabOne.

"As a standalone business, NZME can set the agenda as it continues to innovate," he said.

Regulatory and shareholder approval for the split was given earlier this month.

The company is expected to debut on the NZX at 12 noon.