Aussies Envious at NZ’s Hot IPO Market

There are not many things in which New Zealand enjoys a marked superiority to Australia. Rugby and … It’s a short list. But for the last year, the trans-Tasman economic powerhouse has been casting an envious eye at the Kiwi market for initial public offerings (IPOs). Despite an economy five times the size of Godzone, Bloomberg data shows almost double the amount of New Zealand IPOs compared to the Lucky Country.

This involved A$4.3 billion in share sales and, according to national paper The Australian, such has been the frenzy of activity, investment bankers are now dealing with “IPO fatigue”.

Two local firms, First NZ Capital and Forsyth Barr, feature prominently on the Australia and NZ IPO league table, behind Macquarie Group and Goldman Sachs in first and second place.

Much of the market success is due to the Government’s privatisation programme, which saw the A$1.56 billion float of Meridian Energy and the A$1.4 billion listing of Mighty River Power. State-owned rival Genesis Energy is expected to issue an IPO in the first half of 2014, while the national airline, Air NZ, is also to be put on the block but no time for its share market debut has been set.

Neither company is expected to fetch as high a price as Meridian or Mighty River and once the last of the state-owned entities is through the IPO pipeline, The Australian opines, the hot Kiwi market is expected to cool.

The normal service of Australian economic dominance will then resume.