China Business Summit 2023: Prize draw

Prize draw courtesy of Air New Zealand with Auckland Business Chamber’s Live and Digital events coordinator Katy Riddell.

 

China Business Summit 2023: Call to order

MC: Tim McCready

China Business Summit 2023: Summit close

MC: Tim McCready

Future of Consumption (Asia NZ Foundation & Auckland Business Chamber)

FUTURE OF CONSUMPTION – SESSION ONE from Auckland Business Chamber on Vimeo.

FUTURE OF CONSUMPTION – SESSION TWO from Auckland Business Chamber on Vimeo.

 

The future of consumption is constantly evolving, with new technologies and innovative practices transforming the way we consume foods to the sustainable practices we adopt. From sustainability and vertical farming to cell-based cuisine, the future of consumption is full of exciting developments.

To help you stay ahead of the curve and gain valuable insights, you will learn about the impact of sustainability, vertical farming, and cell-based cuisine on the future of food, as well as how these practices are being implemented in the industry.

Join the Asia New Zealand Foundation and the Auckland Business Chamber for two sessions delivered digitally on the 20th of June.  These sessions will take a deep dive into these seismic changes with business leaders from the Asia region to discuss the forces, the opportunities, and the challenges that are shaping the future of consumption.

Capital Markets: Can ChatGPT predict share price performance?

It’s clear that the capital markets will continue to face significant headwinds, with many of the same pressures and external forces that have shaped the sector in recent years still in play.

Persistently high inflation remains a top concern. While it remains stubbornly elevated, there are encouraging signs that it may have peaked after a considerable effort from central banks to rein in spending.

Much of the supply chain disruption caused by Russia’s invasion of Ukraine has stabilised, but persistent geopolitical tensions and fragmentation, particularly between China and the United States, continue to pose a risk to economic and financial stability.

Adding to the complexity, the pandemic-induced global talent shortage is still acutely felt in multiple sectors, including certain areas of the capital markets.

Gaining momentum are several megatrends that have become entwined with the capital markets sector. These include the rapid technological evolution, the growing need for robust cybersecurity measures to protect against digital threats, and the ever-increasing demand for sustainable investment options.

Capital Markets: Rising appetite for NZ on the ASX

Capital Markets: Rising appetite for NZ on the ASX

The Australian Securities Exchange (ASX) has been pursuing a strategy over the past five years to increase the diversity of stocks available.

Diversification is a central tenet of well-balanced portfolios, and that means companies in the technology and life science sectors are in high demand. Institutional investors, in particular, seek additional investment prospects beyond the long-standing dominance of mining and financial firms on the ASX.

Blair Harrison, head of New Zealand Listings at ASX, says investors are also looking for diversity in geography, and for that reason they also like to see New Zealand companies in the mix.

New Zealand’s burgeoning tech sector already has a formidable presence on the ASX.

Until recently, 10 of the 65 New Zealand companies listed on the ASX were technology companies, two of which were included in the ASX All Tech Index (earlier this month church donation company Pushpay was delisted after being sold to a consortium linked to a Melbourne-based private equity firm).

Xero has achieved “unicorn” status on the ASX as a technology company with a valuation or market cap of over $1 billion. With a market capitalisation of more than $10b, the New Zealand-founded accounting software company is now one of the largest on the ASX, the fifth largest company by market capitalisation in the All Tech index and a constituent of the ASX 50.

Harrison says from an investor standpoint, New Zealand tech companies are well respected globally.

“They tend to exhibit an entrepreneurial approach, demonstrate good governance, and possess a global mindset right from the outset,” he explains.

“This is largely due to the challenge of geographic distance. Being a country that is far away, these companies are aware they must target international markets and adopt an international perspective from the very beginning, which companies in Australia don’t necessarily have to do.”

The large investment community and significant number of companies in Australia mean that New Zealand technology stocks have greater scope to be covered by analysts. The ASX has close to 250 technology companies and around 200 companies that come under the umbrella of life sciences.

Harrison explains that this means that Australia has fund managers, researchers and brokers who can specialise and have greater familiarity with the sectors.

“Rather than one analyst who covers a range of sectors — from industrial to consumer products to technology — you can have a team of people focused on a particular sector, which means they have a very good understanding of how a company is performing.”

That research, in turn, raises the awareness of emerging New Zealand companies among Australian and international fund managers.

These companies can also be compared against similar ASX-listed healthcare and technology companies, which helps analysts determine company valuations and provides economies of scale in research.

Harrison says there is a robust pipeline of technology companies looking to list, and he expects to see New Zealand tech continue to thrive on the ASX over the next few years. This is driven by investor appetite, both from Australia and New Zealand, and further afield.

Beyond tech, other New Zealand sectors that are in demand from the ASX investor base are infrastructure stocks including airports and ports which are not common on the ASX. New Zealand’s aged-care sector is another of interest.

Looking ahead, Harrison says the scale of superannuation funds across Australia and New Zealand will have an impact on investment choices and companies that come to the stock exchange.

By 2041, the total superannuation assets of Australia and New Zealand combined are expected to approach A$10 trillion.

“We know that a lot of that superannuation fund money goes into the stock market,” he says. “That means there will be a huge demand for companies to come to the ASX, and in particular, demand for companies that meet the attributes that the demographic are looking to invest in.”

He points to the rise in economies focused on climate change and the future of food as an example of this.

“ESG is having a huge impact because investors are becoming more powerful. We are all becoming investors — either directly or indirectly — through our superannuation, which is growing exponentially.”

Listings down last year, but higher activity in follow-on offerings

When volatility and uncertainty sweep across global economies, the volume and value of initial public offerings (IPOs) on share markets fall. IPOs were down around the world in 2022, attributable to volatility in the markets brought on by significant macroeconomic events, including Russia’s invasion of Ukraine and surging inflation.

While this was also true for Australia, the ASX still managed 107 listings in 2022. Almost all these listings were in mining, particularly for battery materials like lithium, copper, nickel and gold, which are in high demand.

This figure is close to its annual average of around 135 per year, but down from a phenomenal 2021 that saw 241 companies debut on the ASX fuelled by the cash that was injected into the economy.

“We continue to engage with companies and stakeholders in the ecosystem,” says Harrison.

“Those conversations haven’t slowed down at all, and once the level of volatility returns to a normal level, we expect a lot of these listings to come to market.”

The ASX tracks volatility through the S&P/ASX 200 VIX, a real-time volatility index. This enables interpretation of investor sentiment and market expectations. Notably, the ASX tends to witness higher IPO activity when the VIX value falls within the 10-15 zone.

Despite the decrease in listings last year, the ASX saw higher activity in follow-on offerings as ASX-listed companies raised capital. Follow-on offerings, which include placements, rights issues and share purchase plans, can also be used to bring new sophisticated and institutional investors into a share register and help increase liquidity in a company’s shares.

ASX was the top-ranked exchange globally for the volume of follow-on capital offerings in 2022 with 1060. This was more than double the comparable volume on the Nasdaq exchange in the United States, more than triple the volume on the London Stock Exchange and was higher than any exchange in Asia-Pacific.

This is the third consecutive year that ASX has led global rankings for follow-on offerings by volume. By value of follow-on offerings, ASX was the fifth-ranked exchange globally in 2022. More follow-on capital was raised on ASX last year than on the London Stock Exchange or Hong Kong Stock Exchange.

Some industries were hit hard through the pandemic and needed to raise finance to shore up their balance sheets and get through, but Harrison says that other raises were more opportunistic.

“For example, a company might have taken the opportunity to raise capital for an acquisition of a company at a good valuation compared to in 2021 when valuations were very high,” he says.

Blair Harrison

Blair Harrison is the Head of New Zealand Listings at the Australian Securities Exchange (ASX) and heads the ASX New Zealand office, based in Auckland.

Capital Markets: Hong Kong poised to make strong recovery

Since its borders reopened in January, Hong Kong has been focused on re-establishing itself as a prominent business hub and a connector between mainland China and the global financial community.

This was evident at Hong Kong’s Asian Financial Forum, held in person early this year, where it was noted that despite the need for Hong Kong to navigate macro-economic challenges on many fronts — including rising interest rates, the adjustment in the local housing market, and the global economic slowdown — its strong institutional frameworks and substantial capital and liquidity buffers have allowed the financial system to remain resilient and continue to operate smoothly through multiple shocks over the past few years.

Almost 70 per cent of attendees polled expressed a “neutral to positive” sentiment towards the global economic outlook. The upbeat attitude was likely bolstered by the border reopening just days before the conference.

Indeed, the International Monetary Fund (IMF) recently reported that Hong Kong’s recent lifting of Covid-related restrictions, including border controls that lasted nearly 1000 days, has helped to normalise its economic activity.

The resumption of cross-border travel has seen services exports expand significantly, and domestic private consumption has experienced considerable growth as pandemic restrictions have eased. The IMF projects a real GDP growth for Hong Kong of 3.5 per cent in 2023 and 3.1 per cent in 2024.

Project Auckland panel: Simon Bridges, Viv Beck & Mark Thomas

Project Auckland panel: Simon Bridges, Viv Beck & Mark Thomas

NZ Herald’s Tim McCready leads Heart of the City CEO, Viv Beck, Auckland Chamber CEO, Simon Bridges and Committee for Auckland Director, Mark Thomas in a discussion on the pain points plaguing Auckland’s infrastructure.

Project Auckland: Lessons come flooding in from three Auckland councillors

Project Auckland: Cyclone and flood deluge brings ‘a wake-up call’