NZX sees debt market expanding

NZX chairman Andrew Harmos

The debt market is a real growth area for NZX and is bringing new names to the market, chairman Andrew Harmos said today.

He told shareholders at the annual meeting that NZX was working with the Capital Markets Development Task Force and the Securities Commission on debt market opportunities, including new products.

State owned enterprises, local authorities and other entities, which have not previously accessed the capital markets may issue debt securities.

About $2.3 billion was raised on the NZDX, the NZX's debt market, during 2008, and already about $2.1b has been raised in the first four months of this financial year.

Still, Harmos said companies needed to raise capital as well as debt.

"A healthy capital market is key to a healthy economy. Companies have to be able to raise capital. Debt won't always do."

Attracting new listings remained a priority and would always be so, he said.

"That is difficult in an environment of extreme volatility, where valuing equity can be difficult, and underwriting commitments expensive to secure.

"With the difficulties that the private equity sector faces, it is hoped that more entities in need of capital will access the listed markets - after all, that is why equity markets exist."

Capital and debt need to be funded by savings, he said.

Harmos is an Auckland-based lawyer, rather than a stock broker, and he has worked on mergers and acquisitions. This was the first meeting he had addressed as chairman.

Following demutualisation, and the appointment of Mark Weldon as chief executive, NZX woke up, Harmos said.

"And finally, after Lloyd Morrison must have wondered what more he could do, New Zealand Inc has begun to wake up."

NZX saw "being there" for New Zealand Inc as its core role.

- NZPA