Falkenstein's NZX champange challenge

Tony Falkenstein. Photo / NZ Herald

Just Water chairman Tony Falkenstein responds to NZX's Tim Bennett's article: ''NZ's chance to grasp lost opportunity'.

Tim Bennett's article 'NZ's chance to grasp lost opportunity' needs a response. He blames everyone else for NZX's woes, while really he needs to do is look in the mirror.

Probably the article relates to the Just Water Annual meeting last week, where I made the following comments:

"In terms of the NZAX, in my opinion, this is a satisfactory exchange, and could have been improved with a few changes, rather than go with NXT, which seems to be a platform devised by 2 economists and a lawyer, with no commercial rationale".

Tim Bennett believes NXT is "an innovative, world-class market aiming to lower the cost of listing for smaller, high growth companies". He berates any criticism of NXT, but why are there only 2 companies who have put their hand up to join from the more than one hundred companies they had spoken to about joining this new exchange?

Tim blames the critics (me included), he blames the financial community and he blames the media for NXT's lack of success.

But NXT costs 5 times what it had cost for membership of NZAX, members need to report to the market every 12 weeks, they need to provide analysts with information quarterly for their reports - this is far more complex than NZAX.

I forecast that NXT will never ever achieve 15 members, (the starting membership of NZAX) and his successor will close it down. If I am wrong I will send him (Tim Bennett) a bottle of French champagne!

Basically NZX made a wrong decision. They had a market, the NZAX, with 22 members, and if they had brought in some of the good points of NXT into this market, they could have developed something that was already existing.

NZX chief executive Tim Bennett.

The prescribed disclosure is an excellent innovation, but that in itself is not a reason for NXT. An amendment to the NZAX rules to enhance this market would have been an excellent idea.

At our Annual Meeting, I forecast that "NXT will never ever achieve 15 members, (the starting membership of NZAX) and his successor will close it down. If I am wrong I will send him (Tim Bennett) a bottle of French champagne!"

NXT is a dog, and the sooner NZX face up to it, and reverse their decision to not support NZAX, the better.

Tony Falkenstein is chairman of NZAX-listed Just Water International Limited.