Low interest rates make shares attractive
The Reserve Bank may be worried about the heated property market, but the NZX head says Kiwi investors have over the past year started looking at shares again to boost their wealth.
NZX chief executive Tim Bennett, who has been in the job for a year, said that as interest rates remained low and investors were making less on bank deposits, middle-aged New Zealanders were looking to put their money to work.
Speaking at the Mad Butcher listing ceremony today, Bennett said that while New Zealand's economy was not "booming", investors saw there was money to be made in Kiwi companies.
Well-run businesses needed a way to raise capital and put in place exit strategies for their founders, he said.
Bennett said that during his year at the helm of the NZX, capital markets had grown and he expected them to keep doing so.
Opportunities for well-run companies to list publicly had taken off, he said.
Moa Beer and now the Mad Butcher, which floated on the NZX today at $1.30, were examples of this.
While the Mighty River Power float had dominated recent headlines, Kiwi investors love retail investments, Bennett said.
Mad Butcher chief executive Michael Morton said there had been strong demand for shares so far, and he expected that to continue.
There had already been a 20 per cent rise in the shares today, and during the bookbuild process registrations were three times over the allotted amount.
Morton said listing as a public company would raise the Mad Butcher's profile and hopefully attract more customers as well as push demand for shares.
The retail business had four more stores in the pipeline, with one due to open in New Plymouth in June, and another in Invercargill this year.
An earlier version incorrectly said Tim Bennet said Kiwi investors prefer retail investments. He actually said they love them, not that they prefer them.