Low global interest rates - monetary authorities in the United States, Japan, United Kingdom, Canada, Sweden, Switzerland and the 17 eurozone countries have been running interest rate policies below 1 per cent, making the traditionally high yields paid by New Zealand listed companies more attractive to overseas investors.
The accumulation of KiwiSaver funds looking for investment.
The New Zealand Superannuation Fund, which has over $22 billion in assets.
Among the private sector share offers, Z Energy and Synlait generated strong demand in 2013, raising $840 million and $114 million respectively.
There has also been a steady stream of smaller IPOs - including brewing company Moa, aviation services business Airwork, and technology companies SLI Systems and Wynyard. The Mad Butcher franchise was also reverse listed through Veritas Investments.
It is not just IPOs keeping the capital markets active. Many of the country's largest acquisitions have been funded by equity raisings or comprised major block trades. For example, EBOS Group's $1.1 billion purchase of Australian company Symbion was in part financed by a $239 million placement and rights offer.
Major block trades in 2013 include News Corporation's sale of its 43.6 per cent stake in Sky Network Television for $815 million; Quadrant Private Equity's sale of its stake in Summerset for $97 million in March, for $89 million in May, and $155 million in October; Guinness Peat Group's sale of its 34 per cent stake in Tower for $118 million; and, of course, the Government's sale of part of its shareholding in Air New Zealand.
In addition, Hellaby Holdings raised $50 million and Metlifecare $80 million through institutional placements and share purchase plans.
The New Zealand Venture Capital Association says the volume of mergers and acquisitions (M&A) doubled in the 12 months to June, and that the value of M&A deals rose by half to $2.3 billion. The association has also been quoted as saying that it expects continuing high deal volumes, supported by the Canterbury rebuild and the improving economy.
And the chief executive of the NZX, Tim Bennett, has said he wants to line up five or six medium-sized floats for 2014 to keep the IPO pipeline flowing.
Other options are also being developed to make it easier for smaller firms to raise capital without going to the expense of a full IPO.
These include the new crowd funding and peer-to-peer lending formats, and the so-called 2/12/20 exclusion for small offers, which involve no more than 20 investors, all of whom must know the offerer, and no more than $2 million over any 12-month period.
These are all provided for in the Financial Markets Conduct Act, a once-in-a-generation rewrite of New Zealand's capital markets framework, which was passed in August and will come into force progressively from April 1 next year.
The act will rewrite the law around securities offers. Changes include:
A new legislative requirement for "clear, concise and effective disclosure".
A new system for offer documents comprising a short product disclosure statement, which must be sufficient to enable a non-expert investor to make an informed decision about whether to invest, with other material information posted to an online register and available on the issuer's website.
Principles-based rules for offer advertisements, including relaxed requirements for offer publicity.
A mechanism for ongoing disclosure by issuers, intended to focus on debt and managed investment products.
Reorientation of liability for defective disclosure to civil remedies and penalties, in place of strict liability criminal offences, balanced by improved due diligence and reasonable reliance defences.
