Charlie's loss familiar - NZX

The likelihood that juicemaker Charlie's will join the stream of young Kiwi companies into off-shore ownership is a small loss for New Zealand's NZX sharemarket, but one which is all too familiar for the stock exchange's boss Mark Weldon.

Charlie's major shareholders have given their support to a $129 million offer from Japanese beverage giant Asahi which was a 57 per cent premium on last Friday's closing price of 28c. 

Just two companies have listed with the NZX so far this year  Broken Hill Prospecting and Heartland New Zealand  while three have de-listed, and Charlie's Group's imminent sale makes four.

That compares to 11 listings and 14 delistings in 2009 in the midst of the global financial crisis, and 22 listings and 22 delistings two years prior to that in 2007.

At the half-way stage of this year market capitalisation of the NZX main-board listed companies stood at $57.6 billion, well down from the December 1997 total of $70b, but up on last June's figure of $49.6b.

But Weldon pointed out that there was still a lot of share trading going on, with huge leaps in activity last month compared to June 2010.

Total trades for the month and average daily trades were both up 67 per cent, while daily average value traded had increased 47 per cent in the June year.

Weldon said the NZX would always struggle to keep Kiwi start-ups past the $100m valuation mark where they're starting to show some scale. 

''42Below also sold for a similar amount as Charlie's  ...  what you can take away from that from a budding New Zealand entrepreneur's perspective, is that you can make the capital markets work for you, create a lot of value, get the capital market's support in executing a strategy, and markets will recognise your value based on strategy as well as cashflow.

''You certainly love to see that over the safe private company that just goes for a trade sale and no one ever gets a chance to participate.''

He said the pendulum was swinging back towards the stockmarket with a pipeline of potential public offerings.

The top end of the market  populated by state-owned enterprises like Mighty River Power and Meridian Energy that are expected to float after the general election  would be the key to increasing investor confidence, he said.

''The reality is that until Joe and Jemima in The Hutt get the opportunity to buy a few shares and get a few dividend cheques, they're just not going to take the financial literacy pill  they need a bit of skin in the game to care.''

The sentiment is backed by Rob Cameron of investment banker Cameron Partners, who also sat as chairman of the Government's Capital Markets Development Task Force.

He said Charlie's sale was an example of ''attrition'' in the New Zealand market  those companies that are lost to the NZX because they get an offer that's too good to refuse.

But for more ''births'' of well-capitalised companies at the bottom of the market, the public needed to see them as part of a balanced share portfolio.

''We're beginning to see a trend where people having deleveraged their balance sheets and accumulated savings and are now looking to put it in places they will get reasonable returns, and the stock exchange is looking pretty attractive.''

Cameron agreed the pipeline of IPO contenders was building and he saw candidates for public offerings among his company's portfolio of projects.

''Some of them are not focused on going public  but among them we can see candidates that could be very well suited.

- © Fairfax NZ News