Capital markets

The global market landscape is currently characterised by volatile geopolitical conditions, influenced notably by policy shifts and executive orders from the Trump administration in the United States. These developments have broader implications, particularly relevant to New Zealand due to its export-oriented economy and its significant trade relationship with China, its largest trading partner, and the United States, its second largest trading partner. New Zealand’s third largest trading partner, Australia, also has significant trading relationships with China and the United States.  For investors, understanding the potential impact of such geopolitical dynamics on New Zealand's trade and economic environment is crucial. 

As the global geopolitical landscape continues to evolve rapidly, New Zealand businesses that can proactively manage risk will be well positioned to deploy funding to take advantage of new opportunities for growth and stability. Data from the first quarter of 2025 indicates strong international interest in New Zealand businesses, with the United States and Australia leading this offshore interest. Key sectors showing notable activity included Technology, Media, and Telecommunications (TMT), Consumer, Financial Services and Industrials, and Chemicals sectors.¹

Māori collectives and organisations increasingly contribute to an active private equity market as investors and co-investors, across numerous sectors and industries. The New Zealand Government further contributes to the pool of capital and investment activity, and provides some co-investment opportunities with Crown investment vehicles. 

Notable investments by the New Zealand Government include the New Zealand Superannuation Fund, which hit a record high value of NZD$76.65 billion in June 2024,² the Accident Compensation Corporation fund (nearly NZD$50 billion),³ and KiwiSaver retirement scheme investments (more than NZD$100 billion).⁴ The Government has also established NZ Growth Capital Partners to provide investment and support for early stage and high growth tech companies in New Zealand.

Access to capital remains crucial for the growth aspirations of New Zealand firms. Offshore capital plays an essential role in complementing domestic funding in order to achieve the level of investment required to grow New Zealand’s productive assets.

An offer of financial products (e.g. debt and equity securities, managed investment products and derivatives) in New Zealand is regulated by the Financial Markets Conduct Act 2013 (FMCA) and overseen by the Financial Markets Authority (FMA).

An offer of financial products is made in New Zealand if it is received by a person in New Zealand, unless the offeror takes reasonable steps to ensure that persons in New Zealand cannot accept the offer. This applies regardless of whether the offer is made by a New Zealand or offshore entity.

An offer of financial products will require the preparation and registration of a product disclosure statement, unless an exemption or exclusion applies. The product disclosure statement is heavily regulated under the FMCA and related regulations. 

There are a number of exclusions and exemptions under the FMCA, where no disclosure document is required, or a reduced level of disclosure applies. Common exclusions and exemptions relate to offers to ‘wholesale investors’, ‘close business associates’ and ‘employee share schemes’ that fit within specific criteria. If the investor is unable to rely on any of the exclusions or exemptions, then it is possible to apply for a bespoke exemption from the FMA. 

Australia and New Zealand have a Trans-Tasman mutual recognition scheme under which a New Zealand issuer may make an offer of financial products to investors in Australia without needing to prepare a separate offer document under Australian laws. The mutual recognition scheme also applies to Australian issuers in respect of offers to New Zealand investors.

After a significant reform of New Zealand financial markets legislation in 2013, New Zealand benefits from more simplified capital raising processes, and greater investor protections. The current government is considering further de-regulation in this area.

New Zealand has developed debt capital markets, with traditional and non-traditional debt financiers. The Reserve Bank regulates banks, and non-bank deposit-takers (NBDT) which include institutions that take deposits from the public, such as finance companies. There are 27 registered banks, many of which are internationally owned, and 15 registered NBDTs.⁵

For most New Zealand businesses, banks provide the overwhelming majority of debt, this is estimated to be roughly 96.6%.⁶ Roughly 85% of bank lending comes from the four main Australian-owned banks. The domestic bond market has approximately 151 instruments with $58 billion of market capitalisation. Corporate (non-bank) bond issues are relatively rare, and largely centre on infrastructure (e.g. airports and electricity) and property issuers (including retirement villages).

The bond market extends beyond 10 years in some cases (e.g. Government bonds or Local Government Funding Agency (LGFA), but for most corporates will be limited to a maximum length of five to seven years (depending on the trading conditions).

NZX operates the New Zealand Stock Exchange (NZX) and comprises two main capital markets in New Zealand – the NZX Main Board (principal market for equity securities) and the NZX Debt Market (for debt securities, including New Zealand Government bonds). Over 330 equity and debt securities are listed on the NZX, with a total market capitalisation of over NZ$236 billion.⁷

Issuers can have a Primary or Foreign Exempt Listing on the NZX. An issuer with a Primary listing will treat the NZX as their home exchange and will be required to comply with all of the NZX Listing Rules. Issuers that are already listed on certain overseas exchanges can apply to also list on the NZX as a Foreign Exempt Listing. This means that the NZX will be a secondary listing for the issuer and the issuer will be deemed to comply with the NZX Listing Rules so long as it remains listed on its overseas home exchange.

Once listed, NZX issuers must comply with the NZX Listing Rules, which include the continuous disclosure requirements (ensuring the timely release of material information to the market), additional ongoing corporate governance obligations, and reporting requirements (requiring the issuer to report against the NZX Governance Code). NZX issuers also have specific compliance obligations under the FMCA. 

All listed equity issuers with securities containing voting rights are subject to the Takeovers Code (see Mergers and acquisitions section).

For businesses that are smaller than those that typically list on the NZX, the Catalist Public Market and Unlisted Securities Exchange (USX) offer alternative markets for issuers to list and trade securities. 

The Catalist Public Market is a licensed financial product market. This means that investors have the protection of various provisions of the FMCA including, for example, insider trading, market manipulation, and the monitoring of market obligations by the FMA. Unlike the continuous trading offered on the NZX, Catalist Public Market operates periodic auctions where buyers and sellers will trade at a single price. 

The USX offers a broker-traded market for continuous trading of both equity and debt securities. All trading on USX occurs through USX registered brokers and investors cannot trade directly on the USX market. The USX is not a licensed financial product market (and so various investor protection provisions of the FMCA do not apply).

The FMA, in conjunction with the NZX, regulates New Zealand’s capital markets. New Zealand law prohibits insider trading and other forms of market misconduct in relation to financial products (including misleading and deceptive conduct). Breaches of these laws carry civil or criminal liability for the person responsible, as well as potential accessory liability for others involved in the breach.

_{¹ PwC New Zealand M&A Quarterly Update: For the First Quarter of 2025
² https://nzsuperfund.nz/publications/annual-reports/
³ https://www.acc.co.nz/about-us/our-investments
⁴ https://www.fma.govt.nz/library/reports-and-papers/kiwisaver-report/
⁵ As at 31 March 2025, RBNZ.govt.nz
⁶ RBNZ Financial Stability Report, November 2024
⁷ As at 31 December 2024; https://www.nzx.com/services/nzx-trading}