Despite rumours of a major IPO on New Zealand’s stock exchange, it is unlikely that capital markets teams will get a break from preparing rights issues until next year, at the earliest. Buddle Findlay corporate and commercial partner Grant Dunn said that he has done some preliminary work on a couple of potential IPOs but he would be surprised if any new listing took place prior to next year.

“We’ve given initial advice to a couple of companies but I’d be surprised if they went ahead this year,” he said. “There are certainly some companies thinking about it but having the timing right is absolutely crucial.” Dunn said the government’s extension of the Retail Deposit Guarantee Scheme would also make less capital available to companies considering listing on the NZX.

“If that hadn’t been extended, people with deposits would have been ripping money out of the finance companies and the only alternatives are to put it in a bank or the stock market,” he said. However, those people now have time to think about their investment strategy before the guarantee expires in 2011.

Dunn said he thinks companies will continue to come to market with rights issues, to pay down debt and bolster their balance sheet. He also said that M&A activity was starting to turn, with a number of possible deals in the works, but that he doubts the timing is right for companies to brave a new listing. “Would you really want to do it right now or hold off until next year?” he said.

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