Jarden, the Australian offshoot of the Kiwi broker which launched onto the local market four years ago, is now calling for a joint Australia-NZ share trading index.
As well as stanching the lure of listed Kiwi stocks to the ASX, Jarden’s co-CEO Sarah Rennie expects the greater liquidity of a new combined index to potentially attract more global equity to Australian and NZ equity markets.
Rennie argues that limited liquidity can be a turn off for institutional investors, especially large global funds wanting to drive their major investment dollars harder. Passive index money adds Rennie is a strong driver of liquidity and share prices. For example, with a market cap of $7 billion, dual-listed healthcare stock EBOS (ASX: EBO) remains outside the ASX200, with the bulk of shares being held on the Kiwi register.
As well as discouraging Kiwi stocks from favouring a sole listing on the ASX over the NZX, she expects a combined Trans-Tasman Index to help NZ companies tap into a deeper index pool of capital available within their market.
With delistings eclipsing new listings onto both exchanges since 2022, pools of capital have been shrinking—as they have done globally. As a case in point, here in Australia delistings (146) outweighed new listings three to one in 2023.
“If an ANZ index became the primary benchmark for the region, New Zealand stocks in that index will attract a lot more focus and capital from Australia and international investors,” Rennie told The Australian.
“New Zealand stocks with a meaningful position in the ANZ index will become difficult to ignore.”
Jarden is yet to raise its proposal for a merged Australian and NZ index with security index company, S&P.
With over 2,200 listed stocks the ASX has a combined market cap exceeding $1.5 trillion, positioning it around 15th globally in terms of size. By comparison, as at October 2024, the NZX had 126 listed stocks with a market cap of around NZ$381 billion.