NZX goes back to basics in ‘fundamental reset’

NZX is renewing its focus on its core market platform in what the stock market operator calls a "fundamental reset" of the business to drive shareholder value and reinvigorate New Zealand's capital markets.

The Wellington-based company released details of a new strategy after a five-month review which puts its dominant markets division front and centre, NZX said in a statement. Its executive team is briefing investors on the updated strategy today, which singles out debt, dairy derivatives and environmental and energy markets as growth opportunities tied to that business.

"We are refocused on our core markets business, which is NZX’s fundamental growth platform, and the basis of our social licence to operate," chief executive Mark Peterson said. "Our success is linked to New Zealand’s success, and we will grow opportunities aligned to this advantage, including our debt, dairy derivatives, and environmental and energy markets."

The stock market operator has come under pressure to spur more interest in the country's regulated market with just one initial public offering this year, and the looming departure of high-profile Xero announced last week. Peterson was appointed chief executive this year and was tasked with growing the business to compete more effectively on the domestic and international fronts.

Headlining the five planks to the new strategy is a refocusing of NZX's core business to support current and prospective issuers, drive secondary market activity and grow existing data revenue. That includes work to update NZX's participant and listing rules and governance code, which would also streamline the marketplace and make it easier for issuers to use a broader range of products. It also puts forward new pricing options to drive the secondary market.

On growth opportunities, NZX will seek to expand its dairy offering, and target energy and environment markets, while also maximising its burgeoning funds management and wealth technologies divisions.

NZX said it will look to create a "fit and lean" business, managing costs and simplifying the business. The board is undertaking a capital review and will update the market at the annual results.

"We look forward to building on the momentum created during this review as we continue to put our strategy into action in 2018 and beyond," Peterson said.

NZX shares were unchanged at $1.14, and have risen nine percent this year.

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