Blog

As we prepare articles or thought pieces on topics of interest for investors, these will appear in this list. Use the keyword search to find content or topics that interest you. Please note that our disclaimer applies to all content appearing in our publications or on our website.

With shareholders like this, who needs enemies?

5 June 2023 NZSA Disclaimer While most of the New Zealand investment community were agog at the events impacting a certain building materials company, an announcement made to market by PGG Wrightson (NZX: PGW) late on February 13th caught NZSA's attention. It seems that PGW's 44% shareholder Agria is seeking a special meeting to remove three of the independent directors of PGW, appoint (another) one...

Will resignations cap a decade of disaster for shareholders at FBU?

5 June 2023 NZSA Disclaimer It has been a decade of disaster for Fletcher Building (NZX: FBU) shareholders. Much has been said about Fletcher Building this week, including NZSA's own commentary both in the media and via the NZSA blog article (It's just a flesh wound...) early in the week. Of course, it isn't the first time we have been critical of governance at Fletcher...

It’s just a flesh wound…

5 June 2023 NZSA Disclaimer This scene from Monty Python has indeed set the tone for the events that have played out at Fletcher Building (NZX: FBU) over the last week. Unfortunately, however, the brave and beleaguered 'Black Knight' made famous by the Monty Python sketch represents not just the company itself, but the many thousands of shareholders who have lost their financial limbs. Just...

Proposed trust tax increase a further nail in the coffin for individual shareholders

5 June 2023 NZSA Disclaimer Back in July 2023, the due date for responses to one of the previous government's lesser-publicised bills was coming up fast. It was Mataraki weekend - the new public holiday to recognise the Māori New Year. Clearly, it wasn't a holiday that meant much to the Finance and Expenditure Select Committee, with consultation responses for the Taxation (Annual Rates for...

Will fast food give shareholders a bad case of gout?

5 June 2023 NZSA Disclaimer At a Special Meeting held on December 14th, shareholders of Burger Fuel approved a special resolution for the return of capital to shareholders. Or did they...? A deeper analysis of the shareholder voting results gives a slightly different picture as to the outcome. The 'raw' vote by shareholders is shown in the image below: When taking into account the majority shareholding...

A few highlights from 2023…

5 June 2023 NZSA Disclaimer As I write this final (short) article for 2023, I am enjoying a 30-degree day with a swimming pool nearby. Holiday mode is very close to setting in. And yet for many, 2023 has been a difficult year. The impacts of rising interest rates have been felt by all, with the resultant slowdown in consumer spend and cutbacks by businesses...

An interview with Mark Heine, EROAD CEO

5 June 2023 NZSA Disclaimer Hear from Mark Heine, EROAD CEO. Mark talks to range of issues relating to EROAD in a wide-ranging conversation covering everything from EROAD's underlying sources of value for the business, the company's response to technology commoditisation and much much more. Oliver Mander ...

Good Spirits leaves a bad taste

5 June 2023 NZSA Disclaimer Good Spirits Limited (NZX: GSH) is soon to be delisted. After 19 years, investors have been close to wiped out as Good Spirits became burdened with debt to the point of effective insolvency. With the final chapter nearly complete, I thought it was worth delving into the past to understand what went wrong and to see if there were any...

What is the Board at Sanford’s thinking?

5 June 2023 NZSA Disclaimer We've watched with ever-raising eyebrows as the governance dilemma at Sanford's continues to unfold over the last fortnight. The latest in the saga is the release of the company's Notice of Meeting (NoM) for its shareholder meeting, to be held in late December. The NoM includes a nomination for John Strowger as a Board Member. The Notice of Meeting indicates...

The tangled web of Chatham Rock Phosphate

5 June 2023 NZSA Disclaimer There was much fanfare at the launch of the NZ Alternative Exchange, way back in 2003. Commerce Minister Lianne Dalziel trumpeted the virtues of the new exchange, reflecting that this would provide new opportunities for the many small-medium sized businesses in New Zealand. The conventional market or securities exchange is typically suited to larger, traditionally-structured companies. As a result, smaller...

Quality never goes out of style…

5 June 2023 NZSA Disclaimer There are many ways to express this sentiment. In cricket, the saying goes that " form is temporary, but class is permanent ". In investment markets, the saying goes that " a rising tide floats all boats " - tellingly expressed in the affirmative when all too often it's a case of watching out for the opposite. In this context,...

The sad tale of Wellington Combined Taxis

5 June 2023 NZSA Disclaimer Wellington Combined is not a 'public' company in the typical sense of the word. It isn't listed on any regulated exchange and it is not an investment that can be accessed by retail investors. The company's constitution notes that each shareholder must hold an "operating contract" with Wellington Combined Taxi - essentially, a form of co-operative arrangement with its origins...

Ethical investing – just how well can you do this in New Zealand?

5 June 2023 NZSA Disclaimer Last week was 'world investor week', with this year's campaign focused on helping investors to understand ethical investing. The key message is to invest in a way that is aligned with your own values - whatever your outlook on life, that's likely to make all of us ethical investors at some level. Ethical investing represents a growing trend, not just...

Remuneration: when is it simply too much?

5 June 2023 NZSA Disclaimer There has been an emerging trend during 2023. Clearly, the 'cost of living' crisis impacting the lives of most New Zealanders at the supermarket each week is weighing on the minds of directors when it comes to their own pay and that of their CEO's. This week's blog article focuses on the real-life case studies (EBOS, Tourism Holdings, Fletcher Building...

’tis the season of shareholder meetings

5 June 2023 NZSA Disclaimer This is always a tricky time of year. In the 10 weeks from mid-September to end-November, NZSA expects to cover around 70 shareholder meetings - around half of our annual coverage. This is not unusual. Each year, NZA undertakes a review of shareholder meetings with our 2022 review data showing that if anything, the "peak load" is getting even worse,...

EROAD: Markets don’t like surprises

EROAD has been a roller coaster ride for investors over the last couple of years. From a share price high close to $5.70 in July 2021 and the purchase of Coretex that same month, it's been a fair degree of one-way traffic since then. The departure of founder Steve Newman as CEO in April 2022 came as a surprise to the market; the share price...

An analysis of 2 Cheap Cars and shareholder interests

A vexed question: increased control for a major shareholder versus a better solution for minority shareholders Editor’s note : this article was written prior to an agreement between David Sena and NZSA (as outlined at the end of this article). Nonetheless, it’s an insightful analysis highlighting a potential conflict between the interests of major shareholders and minorities. 2 Cheap Cars (NZX: 2CC) has been the...

The latest slanted playing field: capital markets and climate change

Mid-morning this drab Wellington Monday, I had a discussion with a Board member of Skyline Enterprises Limited as part of our usual process surrounding our company assessment reports and subsequent voting intentions. Skyline has a market capitalisation of approximately $630m, and is one of the largest companies listed on "Unlisted" (USX), a recognised alternative exchange for New Zealand issuers. Its core business is very much...

End of the line for Mainzeal directors

With the benefit of hindsight, "Building Certainty" may not have been the best corporate strapline for Mainzeal. Although, perhaps the decision handed down by the Supreme Court last Friday August 25th might build certainty as to the changes required to our Companies Act. A legal process that began with liquidators (BDO) lodging claims with the High Court in 2015 has finally - eight years later...

Metroglass a plaything for wealthy private investors

It's been an interesting last four weeks for Metro Performance Glass. The sequence of events was well-covered by media in July (and an NZSA Briefing commentary), beginning with the receipt of a non-binding indicative offer (NBIO) at $0.18 per share received by the company's Board on the morning of July 18th. The offer was backed by Peter Wells (represented by Takutai Limited) and Masfen Securities....

Investing in Business Journalism Pays Dividends

By Louise Nicholson Long ago when I was a journalist working in Australia, I recall an editor commenting that “no-one cares about Business”.  In his view, the punters were interested in – in order - Sport, Crime, Celebrities, then Politics.  Not too much politics, mind you – circulation always took a dive during election campaigns.  Poor old business news didn’t get a look in. How...

Are retirement operators pulling the wool over our eyes?

The retirement sector offers numerous investment options, including six NZX listings: Ryman Healthcare (RYM), Summerset (SUM), Oceania Healthcare (OCA), Arvida (ARV), Radius Care (RAD), and Promisia (PHL). So it was a pleasure for NZSA’s Auckland Branch to host Arie Dekker, Head of Institutional Research at Jarden, at its recent branch meeting. Arie covers the Retirement Village sector and has been cautious on the sector for...

Trust in tax. Or would you prefer a pie?

After the well-publicised events of the last week, taxation is shaping up to be a major issue for New Zealanders heading into October's election. Nonetheless, buried within the hype and commentary surrounding PM Hipkins' ruling out of capital gains and wealth taxes, there was reference to a much-less publicised event - an upcoming increase in trust tax rate, from 33% to 39%. I use the...

Capital Markets – is our Companies Act holding us back?

I remember when the new look Companies Act came into force. It turned out that 1993 would be my last year at university, forgoing the opportunity to continue completion of a Law/Commerce double degree in favour of testing my mere B.Com credentials. Even back then, I questioned the value of civil remedy that could only be attained by the limited few who could afford it....

Director independence – time for a change?

Oscar Wilde knew all about conflicts of interest, whether he realised it or not. His play The Ideal Husband highlights a conflicted individual taking advantage of sensitive information for personal gain. Whether or not Wilde would have been in a position to write the current NZX policy settings related to Director Independence is a different question - although it's possible that the writing style might...

EROAD: could a partial Takeover offer be the best outcome for all?

Early on June 22nd, EROAD (NZX: ERD) notified the market that it had received a non-binding indicative offer (NBIO) from Toronto-listed Constellation Software (via Australian-based Volaris Group) for the entire company at a value of $1.30 per share. That represents a significant premium to the closing price of prior days trading of $0.77, but does not seem to fully recognise the company's potential. Will this...

Let’s not throw the baby out with the bath water

In recent weeks, the Michael Wood saga has been well-covered by local media. Scratch below the surface, however, and there is a clear impact on the interests of investors from unconscious bias in the rhetoric that has since emerged. As investors and New Zealanders, we need MP's to understand capital markets. Their active participation in markets should be a 'plus' in ensuring representation - provided...

Change to NZX Listing rules will stack the deck against less knowledgeable investors

Announcements regarding capital markets policy rarely incite much excitement amongst retail investors. Whether you're experienced or inexperienced as an investor, it can be hard to relate to the introspective, jargon-filled discussions that create the rules of the game when it comes to investing in New Zealand's public capital markets. It's ironic, really, when you consider that it is these types of policy and rule-setting discussions...

Sausage roll strategies and the importance of fronting up

The annual shareholder meeting - formerly the AGM (annual general meeting) - has always been the most carefully scripted event on a company’s calendar. As a former PR fixer, I’ve been involved in my fair share of them. I recall one company advising they’d chosen a local theatre for their annual meeting because “the seats are bolted down”. And another company where Board directors cringed...

The power of data: volatility and dispersion

Standard and Poors (S&P) are the company behind many of the stock market indices that are used as benchmarks for portfolio performance - including our own local S&P NZ50 Index. Recently, Anu Ganti , Senior Director, Index Investment Strategy was in New Zealand - and I went along to have a listen. S&P's role in setting and managing stock market indices means that the company...

Are taxing times afoot?

The recent report by NZ Treasury, which concluded that the wealthiest families paid only 8.9% of their economic income in tax, has received wide publicity - however, there has been little critique or factual knowledge of the current tax system, which is generally fair and easy to administer. According to NZ and Australian tax rules, tax paid by a company is imputed to have been...

Learnings from Shareholder Meetings in 2022

This time last year, NZSA prepared a summary of shareholder meetings that had occurred during 2021 - and what that implied for both the workload and the time travel requirements of retail investors. We learnt that most meetings occurred in a relatively narrow window between mid-September and late-November, that 35 days had more than one shareholder meeting and that a total of 28 companies had...

Struggles at Synlait

There is something about the dairy sector that seems to make it very difficult for issuers to get their timelines straight when it comes to forecasts. Investors might remember the issues associated with the a2 Milk Company and its revised guidance disclosures way back in 2020. The share price has never quite been the same again. This time, it's Synlait. From reporting a $38 million...

Why Director Independence matters…

Director independence always has the potential to be a fraught topic of conversation, especially when it comes to the Board Members of our listed issuers. NZSA expects a majority of independent directors on a company's Board, regardless of ownership structure, to ensure effective representation for shareholder interests. After all, an independent director is bound to act in the best interests of the company - which...

Lessons from Ryman Healthcare

First published in The Briefing (Feb 20th 2023) It's been the beginning of redemption for Ryman Healthcare this week. Redemption is in the form of a long-expected capital raise, Ryman's first since listing, with the aim of reducing it's significant debt burden and strengthening the company's balance sheet. We're pleased to see that the company is utilising an entitlement-based offer to raise capital - a...

The Third Team: Linking Boards and Organisational Performance

This article is written by Dr. Denis Mowbray, and originally appeared as a paper within the Chartered Governance Institute in June 2021. It is re-published here with the author's permission. It neatly encapsulates NZSA's core assumptions relating to the role of board members, executives and their combined impact on corporate performance. Why is it that after nearly three decades of governance reform and development it...

2023 Investor Conference

NZSA is pleased to bring you the 2023 Investor Conference - especially welcome after the Covid-related impacts on our events since 2019. We hope you make the most of the opportunity to gain insight from the amazing array of speakers we have brought together. Our Changing World NZSA believes that this is a theme that we can all relate to. Whether it's the sudden change...

2022 Journalism Awards

This is always a very special evening in the NZSA calendar. It is surprisingly rare that journalists from all publications get together - that is something that was clearly evident in the new-format 2022 NZSA Journalism Awards, held in the Maritime Room on Auckland's waterfront in November 2022. The theme of the evening seemed to be about 'connection' - between journalists, the corporate representatives present...

There’s something about ‘dairy’…

The woes of a2 Milk have been well documented over the past 18 months. What exactly might the future hold? Back in the June 2021 edition of Scrip , NZSA CEO Oliver Mander made more than a few comments about a2 Milk (NZX: ATM). His article set out the timeline or downgrades that frustrated investors and caused the share price to fall from the giddy...

Time to end the Fonterra Shareholders Fund

NZSA has been vocal about the relevance of the Fonterra Shareholders' Fund (FSF). We were supportive of Chair John Shewan's call for Fonterra Co-operative Group (FCG) to buy out the Fund. This was further highlighted by changes to the FCG constitution approved by shareholders in December 2021; among other changes, this reduced the maximum possible investment able to be held by the FSF. That may...

Are the Heartland Group Holdings Board Avatars?

The Heartland Group promotes itself as the leaders in digital banking. From my limited interactions with Heartland Bank (NZX: HGH) I am prepared to accept that is true. Perhaps that is why, while rejecting everything I read on social media unless it is about the current All Black coach, I did pause when I read in one post that the HGH board had died of...

Short Selling and Stock Borrowing

An explainer - is this an option in New Zealand? Why would you want to borrow or lend stock? Just as one can lend money to another, one can also lend stocks or shares to another party. The main reason for borrowing stock is the ability to sell a stock that one does not own; commonly known as short selling . Short selling, or in...

Measuring The Halloween Effect

Can retail investor optimism really affect stock returns? This article, written by Moritz Wagner from the University of Canterbury is republished from The Conversation under a Creative Commons license. Read the original article . NZSA has a longstanding relationship with UC when it comes to researching investor sentiment. The upcoming spooky season is not only a favourite time for most kids (and a few adults),...

Is this investment thing really such a good idea?

September 2022 Christchurch-based twenty-somethings Grace and Dave established their portfolio at the beginning of July 2021 with a $NZ10,000 investment. They purchased holdings in ETFs, Investment Trusts and direct shares through their online share trading platform, TradeDoor. Their core goal in establishing an investment portfolio was to build up towards a deposit for a house. The last time we caught up with them, things were...

A focus on listings and capital

Welcome to the August 2022 edition of Scrip . We're really pleased to have contributions in this edition from three different perspectives, highlighting potential pathways for companies to list and create their relationships with retail investors. Our thanks to Joshua Woo (JW Legal), Gavin Lonergan (Direct Capital) and Blair Harrison (ASX) for the time and thought they have put into their articles. We know this...

Direct Listings on the NZX

A perspective from Joshua Woo of JW Legal Direct listing is becoming a common way for companies to get listed on the NZX Main Board. The post listing conduct of these companies are also becoming topical. I have attempted to set out below what’s involved in a direct listing on the NZX, focussing on the company’s decision to list and what this means for retail...

Can Kiwi tech grow on the ASX?

Blair Harrison is a Senior Manager within the ASX Listings team and he heads the ASX New Zealand office which is based in Auckland.  While New Zealand is considered one of the easiest places to start a company , most company owners will eventually want to expand their horizons to access bigger markets and more capital. Founders and owners going through that phase often weigh...

Private Equity, New Zealand style

This year sees the New Zealand Private Capital Association celebrate its 20th year representing the country’s private equity and venture capital industries. A worthy celebration indeed, notwithstanding that each of the founding firms of New Zealand’s private equity industry, Direct Capital and Pencarrow, date their origins back to the mid-1990s with the establishment of managed funds that targeted the large, but untapped, private company market....
RYM Cover

Pushing boundaries at Ryman Healthcare?

As a Ryman Healthcare shareholder, you may have been pleased to see the company recently report an underlying profit of $255 million to 31 March 2022, up 13.6% on last year; a record Australian profit; and the delivery of 711 new units and beds (292 in the first half; 419 in the second half). What you may not have been aware of, although it has...

A fly on the wall – attending the Australian Shareholders Association (ASA) Conference

Over the past year or so, NZSA has been quietly building a closer working relationship with our friends in Australia. We think that's important - most of us have a more 'regional' outlook in our investment approach when investing in this corner of the world. Like others, though, I do wish that most Australians would return the favour by taking a greater interest in the...
Bunny

What makes a good initial public offering (IPO)?

The key function of any capital market is to raise capital. That is not necessarily well understood by most shareholders as the primary purpose. Indeed, many investors believe that the purpose of a stock market is to facilitate trading and serve the needs of investors. In truth, they are merely ancillary functions that provide credibility and liquidity to the primary purpose of raising capital for...
Brian Gaynor Cartoon

Brian Gaynor – we will miss you

On May 16th, we were surprised and saddened to learn of the death of Brian Gaynor earlier that morning. Brian was a staunch supporter of NZSA, with a strong passion for "doing the right thing" for retail shareholders. He was a two-time winner of the Beacon Award (in 2006 and 2020), and shared a passion for excellence in journalism and investment with NZSA. Brian Gaynor...

Meetings, prioritisation and love

These are not three words that always go hand-in-hand. As investors, we all know the deal. We like to keep our finger on the pulse; a "foot in the door", so to speak, in managing our own investments. Even for those of us who for practical reasons have outsourced most of our investments to friendly investment managers, we keep a bit in reserve, simply for...

A great outcome for Christmas!

early January 2022 Just a reminder as to where we're at with our persona-based scenario. Christchurch-based twenty-somethings Grace and Dave established their portfolio at the beginning of July 2021 with a $NZ10,000 investment. They purchased holdings in ETFs, Investment Trusts and direct shares through their online share trading platform, TradeDoor. Right now, they're at the beach enjoying a cracking summer. Over the last six months,...

Deciding what to invest in…

July 2021 We're back with Grace and Dave, to see how they are getting on since they made their big decision a fortnight ago to pursue their investment goal. They've been busy! Grace and Dave made a concerted effort to take a holistic approach to their investing, blending their own experiences and beliefs with some snippets of investment concepts they’d heard from the occasional financial...