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How often we disparage the self-congratulatory
tendencies of other nations. To our minds their patriotic
preening is almost indecent : a cheerleader’s inadequate
underwear being revealed. Yet why are we content with
being left in the locker room? NZX asks why?
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Mark Weldon
Chief Executive Officer, NZX
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Lianne Dalziel
Minister of Commerce
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Scott St John
Chief Executive, First NZ Capital
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Barbara Kendall
World Beating Athlete
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Ann Sherry
Chief Executive, Westpac New Zealand
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Katherine Rich
National Party Economic Development
Spokeswoman
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C7A?D=;N9KI;I
Theresa Gattung
Chief Executive, Telecom
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New Zealanders’ ability to celebrate, vocally and
unashamedly, the success of their national sports teams
'. DPNEF;H7J?D=C;JH?9I is legendary. It can be argued that sporting prowess
has done more to shape the national psyche than, for
example, our propensity toward distinction on the
'/ C7HA;JFB79; battlefield or in trade, diplomacy, or any other arena
where Kiwis measure themselves against potential
competitors.
() C7HA;JKF:7J; By contrast, our celebration of business success tends
to be restricted to the mutual, and invariably muted,
congratulations that take place at commercial forums:
businesspeople recognising other businesspeople, an
award or two, a profile in the business pages, an almost
embarrassed silence. And the Rich List.
When we win at sport, we win with gusto. Our winners
are national heroes. We fete them in the streets. We
compose odes to their eyebrows. We dress like them.
We aspire to be them. We don’t begrudge them a cent
of the money they earn by their excellence. Sometimes
they even plough a proportion of that back into the
communities they represent. The unwitting result of
this is demagogue status.
Sport has had its fair share of cheats and chumps: the
tries that shouldn’t have been awarded, the not-outs that
should, the off-the-pitch antics, the ritual gut-spillings
on network television. But the dents to our sense of
collective pride that these falls from grace administer
are very quickly forgotten. We have another win to look
forward to; another generation of athletic overachievers
on whom to pattern ourselves.
What say we to business? Are the activities admirable?
Is the notoriety deserved? Is inconsistent performance
tolerable, or the odd professional foul forgiveable?
Should business success be respected or rubbished?
Of the people we canvassed, there were plenty willing
to offer their views verbally, but only a handful were
prepared to commit them to paper. As a consequence,
this is a thin issue of OPEN. We believe that the matter
is of sufficient importance to pose the questions anyway.
Congratulations to our contributors on their bravery.
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To give a couple of examples of why confidence matters:
• New Zealand triathletes now expect to win when they
compete. What happens? Everywhere you turn now a
new name pops up wining medals or world cup events.
Why? Confidence bred from a long history of winning,
which creates a real belief in winning, which - critically
- creates winning.
• Fletcher Building now has confidence in its ability to
execute acquisitions. This continued confidence has
spread, and the market and their shareholders now
share that confidence.
Yet in New Zealand, confidence is not something we invest
in, nor that we have a history of. In December last year,
just before a dinner in Auckland, a fellow approached me
and asked if he could have a quick chat about listing. I said,
“Sure”. His first question took me a little by surprise. He
said, “Do you know anything about the Toronto Venture
Exchange?” I said, “A little, why?” He responded that he
had a company that he was thinking of listing and wanted
to know if the Toronto Venture Exchange would be a good
place to list his company. I asked what type of company
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he had. He responded that it was a technology company.
I suggested that, as the Toronto Venture Exchange was
designed for the minerals and exploration sectors, it would
probably not be the best bet. He then said, “What about
Nasdaq? Do you think that would be a good place to list
my company?”
I asked what size his company was. Like most New
Zealand companies, it was smallish – about $10 million
revenues. My response was this: “Since Nasdaq went to
decimals, liquidity outside the top 500 stocks has really
dried up. In practical terms, it means that unless you’re
well over $500 million market capitalisation, nobody will
cover or market make your stock. Also, Sarbanne Oxley
will cost you at least $1.5 million US per year to merely
remain compliant – and I’d guess more, as you won’t have
any internal resource skilled in that area, so it’ll be more
like $2.5 million. So I would say Nasdaq is not suitable for
your company.”
His response was then to ask about AIM. At this point
I said, “Before we get to that, let me ask you, have you
considered the New Zealand market?” His response was,
at that point in time, the most singularly revealing and Why do we have this issue? In my view there are three
depressing thing I have heard in my time in this job. The main reasons:
essence was, “No, but overseas markets have to be better
First, we do have an Apologist national mindset and it’s a
than what we have here.”
major barrier to success. Second, the New Zealand media
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focus far more than they do overseas on the negative, and
continue to believe - despite lack of evidence - that there
are conspiracies everywhere in business. Third, many
XdgcZgÄWZ^c\Vh`ZYidVedad\^hZ[dg public figures are not exactly sending out positive, energy-
CZl OZVaVcY dg Vcn eVgi d[ ^i#  Cd! filled messages about New Zealand.
VXijVaan! ^iÉh ldghZ i]Vc i]Vi#  > lVh Finally, what do we do about it? In my view, it is time for
business to lead the country. For this to occur, business
WZ^c\ ZmeZXiZY id Vedad\^hZ [dg ^i# leaders will have to start speaking out on issues, and
LZaa!WVYajX`!>Ébcdi\d^c\id#6cY the market will have to start rewarding risk takers and
growth companies. (By the way, the start that Rakon
> ldjaY Zm]dgi VcndcZ l]d gZVYh and Delegat’s have had on the market this year should
i]^hidHIDEI=>HGDI# convince anyone that our market will value growth and
export stories, and will reward risk takers.)
I asked on what basis he had formed this view, and, to my
further depression, there was almost none; just a series of
There is a risk, of course, in being visible in New
Zealand. Being vocal as well as visible can double the
conclusions formed. risk. However, it’s a risk worth taking for the future of
this country, and for the confidence that will be derived
The relevance is clear. This guy lacked confidence in the
New Zealand market, and more, in New Zealand. I found
from risks that pay off.
myself in an all too familiar corner – being asked to apologise
for New Zealand or any part of it. No, actually, it’s worse
than that. I was being expected to apologise for it.
Well, bad luck, I’m not going to. And I would exhort
anyone who reads this to STOP THIS ROT.
We have nothing to apologise for, and a lot to be proud of.
More important than that, however, is that we have huge
opportunity here. But we won’t grab it, nor will we realise
any value for it, unless we ramp up our confidence levels.
What other indicators are there as to our level of national
confidence? Here are some:
• 680+ people per week emigrating to Australia. My
view is that while you can’t ascribe the reasons why
to any single item, the trend reflects a greater level of
confidence in Australia’s future than ours.
• Sale of assets at cheap prices. On a recent trip to
Australia, two global players said to me, “When is your
business sector going to stop hoisting the white flag?
When anyone comes over and wants to buy a New
Zealand business, there’s never any fight.”
• Business confidence, as measured by NZIER,
plummeted earlier this year. Not a lot had changed in
the data, but sentiment swung south really quickly: I’m
betting much more quickly than it ever heads north.
IKFFEHJ?D=9ED<?:;D9;
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British MP Tony Blair remarked on a recent trip to New
Zealand that sometimes we forget how we are viewed
from outside our own country. He said that New Zealand
was regarded as “exciting and dynamic”. And that is the
essence of New Zealand - despite what some commentators
would have you believe.
New Zealand is renowned for its “number eight piece of
wire” mentality; its “can do” attitude. This colloquialism
for our entrepreneurial spirit lies at the heart of our
creativity and innovation. It is part of our national identity.
It also lies at the heart of investment and risk-taking.
That is why I am excited by the work I am doing for the
Labour-led government. We have workstreams in place
that will make a major contribution to the economic
transformation agenda and to seeing business thrive in
New Zealand. I am committed to regulatory frameworks
that are proportionate to the risks people face and that
support confidence in our financial markets.
Our international reputation depends on our rules providing
the level of security that is offered in other countries,
because if it looks too different busy fund managers
don’t have time to find out the reason why. Risk taking
shouldn’t mean “flying blind”. There are many types of
investors, from the experienced players to the proverbial
Kiwi Mums and Dads, and they all need to know they are
on a level playing field. They need to know that everyone
is given the same information and they need to know who
is connected to whom. That’s why we have disclosure and
that’s why we have rules against insider trading.
We already rate number one in the World Bank survey for
ease of doing business – that’s up against 155 countries.
But we can do better.
• Trusted and good for business – that’s how the World
Bank sees us.
• Delivering reliable high quality products and services
– that’s how our markets see us.
• Offering leading edge science and research – that’s how
history already sees us.
And that’s how we should see ourselves. Economic
transformation is about confidence - the confidence to
achieve great things and we can.
Quality Regulatory Frameworks don’t sound as if they are
part of that agenda but when you think about the fact that
they are designed to protect our confidence in ourselves
and our trusted brand internationally, it is clear that they
are not only part of the economic transformation agenda,
they underpin it.
And with evidence like this, why would anyone ever think
of packing up and going overseas? After all we have the
best of everything - right here in New Zealand.
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When I started writing this piece, I was determined that the Does it really matter?
answer be no. However, on reflection I had to acknowledge
If there are consequences; then possibly. If there is a bias,
that this bias does exist. I tested the proposition with two
then the consequences are opportunities lost.
Australians who have recently lived and worked in New
Zealand. One was a senior insurance industry executive, A recent example is the purchase of Trade Me by
the other the owner of a private business. Both were Fairfax. No one knows whether this will prove to be a
unambiguously of the view that based on their experience successful transaction for Fairfax or not. However, Fairfax
in New Zealand, this was the case. stakeholders have, by and large, given the company the
benefit of the doubt.
P>CH:GIejaadjifjdiZ]ZgZR

The views represented in this article are the express views of the author, and do not
necessarily reflect the views of NZX.

+ ,
The hypothesis we are examining, infers that if an NZX
listed company had purchased Trade Me for $750 million,
there would have been a different reaction.
This example suggests to me that bias may exist. An
opportunity lost - maybe.
Another case study would be to consider the Goodman
Fielder float. In this situation, you had a vendor that
went out of their way to give New Zealand investors an
opportunity to participate in the Initial Public Offering.
All sorts of bias emerged during this process. Whilst many
investors had the conviction to assess the investment on its
merits, too many looked for validation of the investment
case from overseas, or were distracted by what the vendor’s
motives may have been. This also suggests to me that
there is bias. An opportunity lost - definitely.
As I write, a public company director called to discuss
an acquisition (tragically, we were not advising them),
and raised the question of “how should we approach the
aversion of New Zealand investors to companies investing
offshore”.
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My response was a touch emotive but, heavily edited,
I suggested a focus on the investment case, and that if
it stood up to rigorous testing, then to proceed. It is
desirable for our companies to be on the front foot in this
regard rather than being on the receiving end of this kind
of attention. An opportunity lost - I hope not.
Another perspective is that this kind of bias can feed
political agendas. Are we creating targets out of our leading
companies by not celebrating their successes, and over-
emphasising weakness? One senses that companies spend
more time than they would prefer defending their actions
in this context.
- .
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There is little point blaming, or groaning about any
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bias that may or may not exist. Businesses have to take
responsibility for their own image, and that will ultimately
be driven by their actions. This includes leading opinion,
rather than reacting to it.
New Zealand companies that create great outcomes for
their stakeholders will be embraced, and increasingly,
stakeholders will back our successful organisations. Those
that spend their day criticising will continue to miss 87H87H7A;D:7BB
opportunities.
Importantly, our company leaders cannot allow their MEHB:8;7J?D=7J>B;J;
decision making to be benchmarked, or influenced, by
noise. As it stands, there are a large number of great
We as people really struggle to applaud success and when The biggest influence on all of us as adults is the media.
New Zealand companies doing amazing things. Generally
people are down we tend to kick them further with the
speaking, these companies are very rigorous about what A classic example was the Commonwealth Games results.
“told you so” attitude.
they do. The consequence is that risks that others see are The media looked for all the bad in the results not the
dealt with in a prudent and appropriate fashion. I was incredibly upset when on one of my school visits the good. On average the media coverage was very negative
biggest obstacle in one particular school was “if you win round the whole games. Yet there were some amazing
There are some stunning success stories. Fletcher Building
you are a loser”!!! In one of the primary school swimming success stories. We need to publicise BOTH. If I were a
is creating a material asset base in Australia. Infratil
continues to prove that New Zealand companies can grow
sports one little girl was told to slow down so she wouldn’t child watching the games unfold, my dream would have
upset the other kids!!! been shattered by the bad publicity the athletes got.
successfully beyond New Zealand. And Graeme Hart and
Why would you aspire to be an athlete
his team continue to knock the ball out of the park on What is this doing to our future if this is a
every level. Below the radar of the listed environment, mentality in schools? P>CH:GI Ejaa and dedicate your self to being the best
you can be when you get this barrage of
many companies are finding wonderful niche markets.
The list of great stories is a lot longer than this, and certainly
This attitude must then filter into business,
as this generation gets older. Why can’t
FjdiZ=ZgZR negative press?
Journalists tend not to find the facts any
eclipses the list of less successful excursions, some of we celebrate people who work hard and
which are from another era. I want investors to continue to earn good money, instead of looking for
more - they just look for the drama.
get the opportunity to support our companies’ endeavours faults and concentrating on them to bring We need to control the media, companies
and I will continue to promote an open minded approach that person down? We should be finding need to set up communication specialists
to the investment opportunities we see. the good points and learning from them. - people who handle the media and feed
the media the facts and figures so we get
When you receive this negativity of
accurate, unbiased coverage. Companies
course then you start to lack confidence
need to do the research for the media and
and avoid risk-taking and we become
stay in their faces feeding the right kind of stories.
underachievers, not wanting to stand out in the crowd.
This is creating mediocrity in New Zealanders. Building a positive attitude in New Zealanders. Whatever
you think - will make you feel - then reflect your behaviour.
There has to be a progression of change. Parenting,
Think positive, feel positive, and behave positive.
positive parenting. Caregivers have more influence as
most parents work. School teachers - pay them more so
we get the best.
The views represented in this article are the express views of the author, and do not
necessarily reflect the views of NZX.
The views represented in this article are the express views of the author, and do not
necessarily reflect the views of NZX.
 9>;;HI"DEJ@;;HI
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I’ve always preferred cheering to jeering, so it’s appropriate
to start by considering the many things in New Zealand
that are worth cheering about now. They would be the
envy of most of our fellow human beings. A representative
sample would include:
• Universal access to education, and an educated and
intelligent workforce.
• A business environment that makes New Zealand an
easy place to do business.
• A clean and beautiful environment.
• A solid platform of established primary industries
alongside a clutch of newer resource-based industries; a
burgeoning arts and culture sector and a manufacturing
sector that has transformed itself in recent years.
• A well-established entrepreneurial culture of innovation
and entrepreneurship, with some standout examples.
We can be world-beaters when we want to be.
All of these factors provide a sound base for the sort of
economic advancement that New Zealanders aspire to -
and which will be essential in the decades to come if we are
to maintain the standard of living we think we’re entitled
to - but which is being eroded as our relative economic
performance has declined.
Are these things enough? Based on my experience in
business here, and my involvement with such initiatives as
the Growth and Innovation Advisory Board, here are some
additional factors things that, if harnessed in the right way,
might give us even more to cheer about.
• Conceiving of ourselves as “NZ Inc.”, a single enterprise
of around four million people - with a diaspora of perhaps
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one million Kiwis overseas - united by an agreed vision
and strategic approach to achieving it.
• Cultivating - in our schools, in the business and
general news media, and our day-to-day outlook
- a culture of business heroes, to sit alongside our
more conventionally recognised heroes. Many New
Zealanders could rattle off an all-time best rugby XV
- Colin Meads, Michael Jones, Sean Fitzpatrick and so
on - but what is its business equivalent? Nimble Sam
Morgan, the playmaker, at first-five eighths perhaps?
Stephen Tindall in Richie McCaw’s spot at Number 7?
Peter Maire at centre? Who else?
The point of having heroes is that some of us will want
to follow in their footsteps and aspire to emulating their
achievements. Their own achievements can therefore It’s therefore time to re-frame the debate and ask, Why
have a powerful demonstration effect for the rest of NZ can’t we have both? Why wouldn’t we want to give our
Inc. Imagine ten more Sam Morgans in the years to children and grandchildren an incentive to stay and work
come… in New Zealand by bequeathing both of these things?
• Developing a savings and equity culture, to encourage
Connect these elements to the strong base already in place
investment and facilitate economic development.
and there shouldn’t be any reason for jeerleading.
Compared with the citizens of similar countries, New
Zealanders have not shown a strong predilection for
owning shares nor saving money.
A deeper involvement in “equity culture” could bring
myriad economic benefits, allowing our businesses
greater access to capital, and potentially raising popular
awareness, understanding of and support for what
drives business success - and the policies and other
factors required to sustain it.
• Having and harnessing confidence - what Rosabeth
Moss Kanter calls the “sweet spot between arrogance
and despair. Arrogance involves the failure to see any
faults or weaknesses, despair the failure to acknowledge
any strengths”.
I’ve noted elsewhere that on an emotional spectrum,
New Zealand’s struggle is with despair, whereas
Australia’s is with arrogance. The solid base outlined
above demonstrates that we have much to be confident
about, and yet New Zealanders as a group still tend
to undersell themselves. There’s also a tendency on
this side of the Tasman to solicit, and even crave, the
approval of outsiders - a condition that Australians
seem much less susceptible to!
Confidence is not something that can simply be
ordered up. Leadership - heroes, again - is crucial.
And Kanter also notes that “leadership is not about the
leader, it is about how he or she builds the confidence
of everyone else”. In New Zealand I see a pressing
need to build leaders in all sectors and recognise
leadership at all levels.
• Stop considering New Zealand’s future in terms of
tradeoffs. Too often debate seems to come down to
choice between maintaining what we imagine as a
green and pleasant God’s Own country, or a go-ahead
enterprise economy in which our well-established but
“small” entrepreneurial mentality becomes something
much bigger and more powerful.
The views represented in this article are the express views of the author, and do not
necessarily reflect the views of NZX.
&&
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I don’t believe there’s an inherent bias against New Zealand
business. If anything, the negativity that can sometimes
surround our companies - particularly large ones - is not so
much a result of “jeerleading” but a function of our size.
When New Zealand has a population the size of Sydney,
it doesn’t take much to become a noticeably big fish that
attracts media and public attention.
There is not so much bias, but an acute interest and that
means high levels of scrutiny - especially if something goes
wrong. The job of business journalists and analysts is to
scrutinise companies on behalf of readers and shareholders.
I don’t get a sense that the business media or analysts
are any tougher on kiwi businesses than those which are
overseas owned. When a significant number of firms are
state-owned, this inevitably means a very high level of
political interest and debate. Hence the different political
and media interest in TVNZ versus the interest in the
performance of Canwest, or the performance of Radio
New Zealand versus the Radio Network.
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I am not so much concerned with “jeerleading” or negative
commentary on business as the government’s fundamental
distrust of business, and how that translates into new laws
and regulations.
There is a mismatch between the government’s words
and its actions. The government will make positive
cheerleading comments about business but then slowly turn
up the regulatory heat. This is because Labour deep down
believes business is bad and requires greater controls.
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When the purpose of negative commentary from the
government is unclear, that has a major effect on decision-
making and investment. Uncertainty for business means
postponed decisions, under-investment or worst of all -
no investment at all. Ultimately the whole country pays
for that.
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New Zealand needs a cultural change so we develop more
pride in business. That starts at home and in schools, but
also requires business leaders to engage more in debate to
rebut “jeerleading”.
We need to challenge the government to match their talk
with action. Take Trevor Mallard’s recent speeches on
business. In a seemingly Road to Damascus conversion
he called on New Zealanders to celebrate business and
wealth, but this is from a minister in a government that
has piled on regulatory burdens and costs on business over
the past six years.
Moving from business jeerleading to cheerleading should
not be seen as just a change in language. We as a country
need to deal with the raft of concerns that contribute to
whether a company stays here or moves offshore.
That means dealing with contentious issues such as tax,
employment law, and other regulation. Words should be
followed by actions.
The views represented in this article are the express views of the author, and do not
necessarily reflect the views of NZX.
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fWhj_YkbWh5 international.
It’s a cliché but still true that New Zealanders are great
at celebrating sporting success but much less so when it M^WjYWdX[Zed["WdZm^e_ih[ifedi_Xb[\ehcWa_d]
comes to business. I think it really comes down to the WZ_\\[h[dY[5
fact that New Zealanders are suspicious of business itself. We should celebrate success locally. New Zealand is a
Rather than celebrating success, there’s a view that high tough place to do business because from day one you are
achievers much have trampled on other people to get to battling problems of scale and distance. We are all of us
the top. responsible for making the difference - rather than making
excuses.
And while New Zealanders are actually a pretty
entrepreneurial bunch, we are too hard on ourselves. It’s a
mark of great character and commitment in some countries
to have fallen over and picked yourself up one or twice;
we’re not that generous in New Zealand.
Maybe attitudes are changing though. New Zealanders are
pretty happy with the successes of Peter Jackson and Sam
Morgan. And The Warehouse is seen as a great example
of a Kiwi company that’s been built from the ground up.
They are examples of initiatives that are very much driven
by key individuals.
That’s a good sign because I think New Zealanders have
had a strong tradition of both the tall poppy syndrome
and the view that governments rather than individuals
know best. That has always been one of the marked
differences between Australia and New Zealand, but
maybe it is changing.
M^Wj Wh[ j^[ Yedi[gk[dY[i \eh _dl[ijc[dj WdZ
Z[Y_i_edcWa_d]edWYehfehWj[eh_dZ_l_ZkWbb[l[b5
Success breeds success. If you see others in business doing
well in the New Zealand environment then the attraction
of doing business in New Zealand is evident. The views represented in this article are the express views of the author, and do not
necessarily reflect the views of NZX.
&(

J>;H?I;E<J>;;N9>7D=;
JH7:;:<KD:
MehbZm_Z[";nY^Wd][JhWZ[Z<kdZi";J<i"Wh[
mehj^ceh[j^WdKI*-(X_bb_edWdZb_ij[Zed)*
Z_\\[h[dj[nY^Wd][i$
ETFs have seen tremendous growth over the past few
years since they were introduced 13 years ago. It’s a type
of investment that can provide diversification, simplicity
and a level exposure that’s normally inaccessible. In New
Zealand, ETFs are also experiencing a bout of popularity.
Five of the six listed on the NZX Market are managed
by Smartshares Limited, an NZX subsidiary. They offer
exposure to both the New Zealand and Australian equity
markets, as well as a regular savings plan to help grow
investments over the longer term.
Heb[[nfWdi_ed
The expanding role of portfolio managers has led to
growth in the demand and supply for ETFs. The demands
of covering all developed and emerging markets, as well
as individual sectors and countries, has driven portfolio
managers to admit that they have neither the time or
resource to do these areas justice – so they are turning to
ETFs to gain that exposure. This allows them to pick
stocks in the markets that they feel they can add value in.
JhWdifWh[dYoWjj^[ceijh[Y[djfh_Y[
The daily holdings of an ETF must be disclosed to the
market. This means investors can see the underlying
holdings of their ETF. Index-linked products can smooth
the volatile moves associated with individual company
fortunes or fashion trends. Investors also gain liquidity as
they can be bought and sold at the stated market prices.
:_l[hi[heb[m_j^_dWfehj\eb_e
An ETF can have different roles within a portfolio. It
can act as a core holding for a portfolio or to establish
overweight or underweight in markets that show
promise. As the core of a portfolio, short term tactical
investments can be made around it with the aim of
increasing overall returns.
&)
?dYh[Wi[Z[nfeikh[
ETFs can serve as building blocks or a gap-filler to sectors
that are under-represented in a portfolio. They also can
offer a convenient path into specific countries or regions.
M^[h[_iD[mP[WbWdZ_dWbbj^_i5
New Zealand is well advanced in terms of new initiatives
for ETFs. Smartshares introduced the first ETF to New
Zealand in 1996 and was one of the first fund managers
in the world to allow individual investors to make regular
investments into their ETF holdings. The cost of
investing small amounts on a regular basis had previously
been unattractive. Smartshares eliminated these barriers
by allowing a direct deposit system to transfer funds from
investors’ bank accounts – as little as $50 each month – and
investing that money in the ETF or ETFs of the investor’s
choice. That choice is expanding too.
J^[edbofbWY[oekÊbbÓdZWicWhjEPPO
Smartshares has just announced the addition of a fifth
fund, SmartOZZY. It tracks the S&P/ASX 20 Index and
contains some of Australia’s most prominent companies
such as Westpac, Coles Myer and Woolworths, to name
just a few.
SmartOZZY, formerly the Tortis Ozzy Fund, has been
purchased by Smartshares from TOWER Managed Funds
Investments Limited to expand the range of products
available to unitholders. Now SmartMOZY holders can
extend their Australian investment to cover 70 stocks in the
ASX and SmartOZZY can be another way for SmartFONZ,
SmartMIDZ and SmartTENZ holders to add Australian
stocks to their portfolios to create a diversified Australasian
equity portfolio in a simple manner.

ONE WAY TO
?DL;IJ?D=?DJ>; GIVE BACK
LAWRENCE GREEN
I > 7 H ; C 7 H A ; J
Every business leader, owner and entrepreneur says it at some
stage in their working life: they want to “give something back to
>7ID;L;H8;;DIE;7IO their community”. A new voluntary programme will give them
the chance to do that.
Future Vision’s Centre for Leadership Studies has been set
up to offer training, research and development for leaders of
non-profit organisations who normally couldn’t afford training.
>[ndjYdcÉi]VkZbjX]i^bZ! It needs sponsorship, donations and grants from the business
community to operate.
bdcZn dg ZmeZg^ZcXZ ^c i]Z
Future Vision has been set up by leadership and development
h]VgZbVg`Zi! HbVgih]VgZh specialist Lawrence Green, director of Wellington consultancy
company Venture Education. Green is also an associate of the
d[[Zgh V l^YZ gVc\Z d[ Centre for the Study of Leadership at Victoria University and
co-author of “The Kiwi Effect”.
Y^kZgh^ÒZYh]VgZedgi[da^dh#
Lawrence Green makes no apology for being idealistic.
8]ddhZ [gdb dcZ d[ djg “When people are being entrepreneurial, they’re normally
driven by self-interest. This is about taking on something
[djg egdYjXih VcY \Zi for the good of the community and making it exciting. My
greatest hope is that the centre plays a part in building a
ndjg ^ckZhibZci ^c i]Z larger pool of outstanding leaders who can truly have an
impact on the community.”
h]VgZbVg`ZihiVgiZY#
Green believes that in the corporate world, most people who
are involved in leadership development are not truly committed.
“However, people working in voluntary organisations - by the
fact they’re doing what they’re doing for nothing - means they
have the passion, the drive and the commitment.”
A small contribution from a company or entrepreneur can
have far-reaching consequences, he believes. “It provides the
opportunity for people to make a real impact. People who are
at the coalface, people who have a huge desire to develop and
J^[[WiomWo_dje make a contribution but who don’t have the resources.”
j^[i^Wh[cWha[j Green’s strongly-held belief is that the state of a community’s
voluntary organisations is a reflection of its overall health and
well-being. He has been working on this project for two years
but it’s been a plan that has haunted him for nearly two decades
mmm$icWhji^Wh[i$Ye$dp after a stint working in the voluntary sector in his twenties.
“The work most organisations were doing was brilliant but they
were unable to make the most of their people because they
didn’t have the resources to invest in them.”
Investment Statements can be downloaded from the The first Future Vision programme was launched in Wellington
Smartshares websites. Units in the funds have been
accepted for quotation by NZX and will be quoted upon in June and is intended to be offered nationally next year. n
completion of allotment procedures. However the Special
Division that regulates Smartshares Limited takes no
responsibility for the offer.
&*
 >7B<O;7HH;IKBJI(&&,
I]^h^hhjbbVgnd[i]ZXdbbZciVgn\^kZcWnCOM8:DBVg`LZaYdcViVbZY^VVcY
VcVanhihÉWg^Z[^c\[daadl^c\i]ZgZaZVhZd[i]Z'%%+=Va[NZVgGZhjaihdc',?jan#
Consistent with the new treatment we introduced at half
year 2005, NZX’s results are divided into four discrete
sections. These comprise the consolidated result for the
NZX Group, followed by the core NZX Markets business,
then the two existing subsidiary businesses: Smartshares
and Link Market Services.
DPN=hekf
There are four key measures for the NZX Group
performance. These are revenue, expenditure, EBITDA
and NPAT. Group operating revenue is up 21% over the
same period last year and expenses are up 13% overall.
Operating EBITDA is up 27% year on year and NPAT is
up 47%.
I will outline now where each of the NZX businesses has
contributed to the overall Group result, and how the results
reflect NZX’s ongoing drive to deliver certainty and value
for all our stakeholders.
DPNCWha[ji
The primary measure for the Markets business
performance is operating EBITDA, driven by consistent
revenue growth. Operating EBITDA is up 24%, driven by
a 19% increase in revenue and a 16% increase in operating
expenditure.
The three key areas of this business from a revenue
perspective are market information, listings and
transactions. Market information revenue increased by
68%, listings revenue is up 20%, and trading revenue
increased 5%.
The fifteen new listings in the period, raising a total of $2
billion across all our markets, is evidence of a high level
of successful capital raising for New Zealand companies
behind the most obvious IPO and secondary market
capital raising activity.
&+
The stand-out in this area is the absolute confidence
expressed in our markets by Rakon and Delegat’s.
Together these companies proved that New Zealand
investors have an appetite for growth stocks as well as
yield, and that you don’t have to submit to the cost and
angst of listing on overseas markets to raise capital, or to
gain access to overseas markets or gain strong valuations.
The performance of these two stocks since listing has been
nothing short of outstanding.
I want to congratulate Delegat’s and Rakon for their
foresight and their mettle. We know there are plenty more
New Zealand companies that share these characteristics.
Our markets want them. Our investors want them. Its
performance like these that will eventually break down
the ‘overseas is better’ mindset.
The other star performer in this area is market data.
It’s a fact that markets depend on timely and accurate
information for their operation. Packaging and marketing
of this information by NZX means that more and more
potential investors can access the right set information
about New Zealand listed companies. This is not only
good for visibility, it’s good for liquidity.
The breadth of products has also grown, for example i-
Search and indices revenue will be approximately $400,000
for the year. These are ‘organic additions’ to the business
and are now contributing meaningfully. We have also seen
an 18% increase in the number of data terminals in the
past year, there are now over 8,000 terminals receiving
NZX information around the globe.
Also slotting into the data area is our newest business
Agri-Fax. This business specialises in preparation and sale
of agricultural and horticultural data, to a large range of
client groups. The business is solid and well-run, and the
sector it serves is promising and tremendously important
from a national perspective. That sector responded to
the news of NZX’s acquisition very positively, and the
ongoing developments with the Agri-Fax founders are
more positive still. We are very positive that growth will
occur out of this business.
Returning to liquidity now: inclusion in an index is good
for liquidity, and NZX now has one dedicated to our high
growth science and technology innovators. The profile
and coverage afforded by index membership proves
highly lucrative for listed companies, and NZX is doing
its bit to promote this vital growth sector. There will be
more in both the technology and index space as the year
progresses.
DPNIkXi_Z_Who8ki_d[ii[i
Smartshares is the first in this category. Smartshares offers
what we believe is the strongest and best positioned
funds manufacture and distribution business in New
Zealand. Smartshares are increasingly well placed to
capture increasing flows to savings products that have a
New Zealand and Australian focus from a wide range of
distributors. NZX believes that funds in New Zealand
and Australia are very well positioned for the upcoming
tax changes.
The acquisition of the smartOZZY Fund, with minimal
impact on the bottom line, is proof both of the robustness
of NZX’s core revenues and the sound pursuit of growth
opportunities to broaden investment choices for New
Zealanders. Since its acquisition from Tower Managed
Investments last month, the smartOZZY offering has been
enhanced by the extension of the cash application facility,
the Regular Savings Plan and Dividend Reinvestment
Plan, all features of our other four Smartshares funds.
These provide continuous month on month inflow of
new FUM.
Notwithstanding an ongoing decline in retail equity
funds over the last three years, Smartshares funds under
management have continued to climb. Smartshares
promise of low fees, transparency, and simplicity continues
to attract investors.
Smartshares finished the half with $460 million in
FUM, $330 million in listed Exchange Traded Funds
(ETFs) and approximately $130 million in non-listed
wholesale funds operated on behalf of the New Zealand
Superannuation Fund.
Operating revenue reached $893,000 in this half, a 42%
increase over the same period last year. Operating
EBITDA was $159,000 compared with a loss of $160,000
in 2005.
LINK Market Services, a joint venture with LINK
Australia, is equity accounted and produced a $309,000
loss for the first half of 2006. As outlined in our release to
the market, the LINK result reflects the impact of three
non-recurring costs. These are: contractor costs from the
migration from the RML system to the New Zealand
Oscar system; project management and IT costs in
implementing Telecom links; backups to the new system;
and the migration, development, and legal costs associated
with the purchase of the ANZ National Bank debt register.
On a positive side, net target of 50% of IPOs was achieved,
but the size of those IPOs was not large in terms of new
holders. Revenue from those holders, as well as the ANZ
National Bank register and a meaningful decrease in the
cost base, will flow through in the second half.
IkccWho
To summarise, across the NZX Group, performance in
the early stages of the second half year indicates a healthy
outlook. In addition, I am pleased to welcome to our
senior team some highly talented individuals in Finance,
Strategy, and Clearing and Settlement. I am confident
that they, alongside our existing highly skilled team, will
deliver what our shareholders and our markets need.
And for the future, our strategy remains clear and consistent.
NZX will continue to invest in areas of the business – and
the markets – that enable us to bring positive change to
New Zealand markets, and to capture value from the
evolution of those markets.
&,
 DPNEf[hWj_d]C[jh_Yi#>Wb\O[Wh(&&,
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;^ghiCO )!)&' '(#- '&#- ;^ghiCO *,!*-% &.#' &,#*
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<H?7LZgZ (!&.& &,#' &+#, <H?7LZgZ (,!**& &'#* &'#)
9^gZXiBVg`Zi6XXZhh &&*!'+) (.
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The NZSX Market has had two very successful Initial
COHMDkZghZVh )' "&. & 9Za^kZgnHZiiaZbZciEVgi^X^eVcih &,
Public Offerings, IPO’s, this year; Delegat’s Group and
CO6M '- &, ( ;6HI:GEVgi^X^eVcih (
Rakon. Delegat’s Group is a leading producer of super
CO9M ), ' ) ;jijgZhDei^dch;^gbh )
premium branded New Zealand wines for export and
HZXjg^i^Zh ;jijgZhDei^dch>cigdYjX^c\7gd`Zgh +
DPN<?HCC7HA;JI>7H; domestic markets. The IPO raised $45 million and 32
9ZWi &%' && &% Hedchdgh )+
First NZ Securities tops the list for both value and number million new shares were issued. Rakon Limited is a world
:I;h + % % 9^hig^Wji^c\JcYZglg^i^c\Hedchdgh (
of trades for the first half of 2006. First NZ Securities has leader in the development of high performance frequency
LVggVcih (* )+ &% C7HA;J:7J7
23.8% market share in terms of value traded and 19.2% in control technology based on quartz crystals, which lie at
=N NI9 =N
terms of the number traded, a 2% increase in market share the heart of electronic products such as Global Positioning
CZlZfj^ingV^hZYb +-. +-- Eg^bVgn9ViV9^hig^Wjidgh &.
for both categories from the first half of 2005. Satellite (GPS), Wireless, Networks, Cellular, CDMA,
CZlYZWigV^hZYb &!(-' &!(-( GZVaI^bZ9ViVIZgb^cVah -!(&%
GSM, Telecom, Radio, and Microwave. Its IPO raised
Goldman Sachs JBWere held out ABN AMRO Craigs for
IC7HJI>7H;I B?DAC7HA;JI;HL?9;I
over $66 million.
second place in the market share for number of trades, and
=N 8]Vc\Z =N
is second for the amount of value traded too. Macquarie Witan Investment Trust plc listed as an overseas company
;jcYhJcYZgBVcV\ZbZcib ((% ,' IdiVa>hhjZgh &'+
Securities has made a solid debut, winning 5.4% of the and ABN AMRO Equity Derivatives NZ issued a further
=daYZgh &)!)-+ (- A^hiZY>hhjZgh ,+
market share for the value traded. Macquarie Securities 9 new third party instalment warrants.
CjbWZgd[;jcYh * '*
conducts the institutional business side of the Macquarie
Equities NZ Limited.
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DPINCWha[j#D[mB_ij_d]i DPN+&?D:;N7JJH?8KJ?ED DPNIC7BB97F?D:;NF;H<EHC;HI
Of the 50 securities in the NZX 50 Index, Ryman The NZX SmallCap Index comprises the domestic equity
>hhjZg HZXjg^in 9ViZ HZXjg^inYZiV^ah
XdYZ a^hiZY Healthcare had the biggest positive return in this six month securities quoted on the NZSX Market but not large enough
67C6BGD:fj^in KVg^djh &%6eg >chiVabZcilVggVcihdc.aZVY^c\COM period. Ryman has been trading at all time high share price to qualify for the NZX 50 Index. From this segment of the
9Zg^kVi^kZhCZlOZVaVcY '%%+ HZXjg^i^Zh
levels and ended June at $8.61, its growth acceleration has market the top performer was Gullivers Travel Group. NZX
9ZaZ\ViÉh<gdje 9<A '&6eg DgY^cVgnh]VgZh^hhjZYVi&#)%^c>ED!
'%%+ gV^h^c\)*b also led to the inclusion in the NZX 15 Index. Ryman also makes an appearance, returning 37.08% in the last six DP7NC7HA;JF;H<EHC;HI
GV`dc G6@ &+BVn DgY^cVgnh]VgZh^hhjZYVi&#+%^c>ED! Healthcare is an operator of healthcare facilities for the months. The New Zealand Alternative Market is a cost-effective
'%%+ gV^h^c\&%b
elderly in New Zealand since 1984, it listed in 1999. listing facility for small to medium sized and non-standard
L^iVc>ckZhibZciIgjhi L>I %-BVg DgY^cVgnh]VgZhd[DkZghZVh>ckZhibZci
eaX '%%+ Igjhi!8dbea^VcXZA^hi^c\
The returns in this table include both share price companies.
Jef'&F[h\ehc[hi
movements and reinvested gross dividends.
HZXjg^in AVhiEg^XZ ;^ghi=Va['%%* &'Bdci]
C7HA;JH;JKHDI GZijgc GZijgc DP7NJef+F[h\ehc[hi
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The NZX Equity Indices reported mainly positive returns Jef'&Fei_j_l[9edjh_XkjehijeDPN+&?dZ[n '%%+GZijgc
;^cohd[iHdaji^dch &#& *,#&) ')#-)
for the first six months of 2006, with the exception of the HZXjg^incVbZ >cYZm AVhi ;^ghi=Va[ ;^ghi]Va['%%+ &' HViVgV8d"de<gdje &#)% &(.#. ).#.+
CO;^cVcXZ=daY^c\h &#* *(#,- *&#)*
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8dbk^iV (#%% (%#, *'#&.
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bond and bank bill indices designed to track the DPN[nj[dZi_jiZWjWfheZkYjije_dYbkZ[7]h_#<Wn DPNIY_J[Y^?dZ[nWdZI[c_dWhi
performance of fixed interest securities in New Zealand. VXXZhh id dkZg In March NZX announced the purchase of North- New Zealand Exchange Limited (NZX) has developed a
The table below shows the performance of the main Canterbury based rural data company, Agri-Fax. new index to recognise and promote the breadth of science
indices to the end of June.
&%%!%%%XdbeVcn NZX CEO Mark Weldon was keen on the rural investment
and technology companies currently listed in New Zealand.
The NZX SciTech Index is the first in a series of special
DPN:[Xj?dZ[nH[jkhdi from the start. “One of NZX’s core values is Advancing
interest indices to be developed by NZX. It includes our
GZijgch (%?jcZ'%%*9ViV New Zealand. We recognise how critical the rural sector is
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top information, biotechnology and industrial technology
NZX Listed Issuers, all of whom have a significant business
to contribute to Advancing New Zealand,” said Weldon.
COMCO<dkZgcbZciHidX` '#&( *#&' *#.) )#%+ interest in the development and commercialisation of new
>cYZm nZVgh Established in 1987, Agri-Fax produces three main data technologies.
COM8dgedgViZ>ckZhibZci (#'& +#%) ,#%, '#,* types to media and other rural customers: farm gate pricing;
<gVYZ7dcYh>cYZm nZVgh “NZX has identified this sector as an important one to New
overseas market information; and Market monitoring. Agri-
COM.%"9Vn7Vc`7^aa>cYZm (#,. ,#*+ ,#)- c$V Zealand and NZX Market investors,” said Geoff Brown,
Fax will continue to be based in North Canterbury and

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NZX Head of Products. “Until now the sector has been
be supported by NZX operations in Wellington. Agri-Fax
something of a quiet achiever. Many of the companies
D;MB?IJ?D=I founders Rod McKenzie and Dave Meares have agreed to
have gained international recognition in their specialised
There have been nine new debt listings on the NZDX stay on with Agri-Fax for at least three years to transition
fields and have many more exciting growth opportunities;

m_j^
market this year raising over $1 billion. existing operations and carry out development work.
NZX wants to help raise awareness of their success.”
Ed[e\j^[edboFbWY[ioekÊbbÓdZWicWhjEPPO NZX hosted seminars in August whereby the constituent

_#I[WhY^
DP:ND[m:[XjI[Ykh_j_[iGkej[Z Now you can really diversify your portfolio with companies presented their stories to the investment
>hhjZg HZXjg^in 9ViZ HZXjg^in >ciZgZhi BVijg^in Smartshares. We have extended our product range to community.
XdYZ a^hiZY ineZ gViZ YViZ
include the SmartOZZY Fund, the fund that tracks the
6COCVi^dcVa7Vc` 6C7%'% &,$%'$'%%+ CdiZh +#-' ;ZW'%%.
top 20 companies Listed on the Australia Stock Exchange 9h[Wj_d]LWbk[\ehDPNB_ij[Z?iik[hi
6COCVi^dcVa7Vc` 6C7%(% &,$%'$'%%+ CdiZh +#-% ;ZW'%&&
(ASX). NZX’s business is founded on the belief that a healthy
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capital market infrastructure is essential for the economic
8gZY^iHV>AH 8H6;6 &.$%+$'%%+ 8gZY^i -#*% 9ZX'%&' SmartOZZY is the fifth addition to the Smartshares family;
well-being of this country. We are passionate about markets
HV^ah
it tracks the S&P/ASX 20 Index and contains some of
and business, and about ensuring we serve our Listed
<h[[jh_Wb
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Australia’s most prominent brands such as Westpac, Coles
Issuers and New Zealand investors, to achieve economic
=ZaaVWn=daY^c\h =7N%&% '+$%+$'%%+ 8Ve^iVa -#*% ?jc'%&&
Myer, Woolworths and Foster’s.
CdiZh
wealth and well-being. As part if our drive to deliver
EgdkZcXd<gdje EKD%'% &-$%)$'%%+ 8Ve^iVa .#'* 6eg'%%. Jho _#I[WhY^ \h[[ \eh ed[ cedj^$ SmartOZZY, formerly the Tortis Ozzy Fund, has been better service to our customers we have introduced a new
CdiZh purchased from TOWER Limited. Smartshares assumed Client and Market Services Group, combining the Listed
HiAVjgZcXZEgdeZgin HIA%(& &+$%'$'%%+ 7dcYh .#'* BVn'%&& Id ig^Va ^"HZVgX] dg [dg bdgZ management rights from 30 June 2006 and will continue Company Relations (LCR) team from Market Supervision
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^c[dgbVi^dc eaZVhZ XVaa i]Z BVg`Zi to outsource the underlying investment management to with the Participant Relations and IT Operations teams
I8CO;^cVcXZ I8C)-% ''$%($'%%+ 7dcYh +#.' BVg'%&(
Passive Funds Management Limited. The acquisition of Market Operations. This creates a single, consolidated
I8CO;^cVcXZ I8C).% ''$%($'%%+ 7dcYh ,#%) BVg'%&+
9ViViZVbdc +)))(+'-,.dgZbV^a of smartOZZY brings the total Smartshares funds under client and service focused area for NZX’s professional
YViV5com#Xdb# management to over $450 million. clients. The team is jointly headed by Adrienne Quinn and
Units in smartOZZY will continue to be quoted on the James Winskill, who joined NZX from First NZ Capital
NZSX Market under the security code OZY. The Cash Securities (FNZC).
Application and Regular Savings Scheme have been

mmm$_#I[WhY^$dpn$Yec extended to include this new fund.

'' '(
To advertise here, contact open@nzx.com
I_d]b[Fe_dje\7YY[ii BEST PRACTICE IN
CMS’s primary goals is to create of value for NZX
professional clients through single point of access for
service and product support. We endeavour to provide an INVESTOR RELATIONS
improved scale and ability to deal with peak flows by:
• Increasing the speed and efficiency for service
As a medium that promotes fair and equal disclosure
provision.
of information to market, webcasting has become
• Providing a single point of ownership for service delivery,
relationship management and issue resolution. an established tool for promoting best practice in
Investor Relations. It provides a valuable channel of
• Focus on core market systems and external impact on
external parties. communication for retail and institutional shareholders
• Reliable and consistent customer focus, application as well as analysts, media and staff.
and communication to external parties.
Quick and easy to implement, webcasting allows your
NZX, Proud to be NZX Listed and Proud to be Advancing audience worldwide to watch company events, both
New Zealand.
live and on-demand; financial results presentations,
corporate announcements, AGMs, capital market/
analysts days, roadshows and press events - all can be
delivered to anyone with a PC.

Increased globalisation of financial markets and

demand for timely disclosure of financial information
has prompted a growing trend in the use of webcasting
by IR departments. 82% of the ASX top 100 currently
use webcasting with 90% of the FTSE 100 and 95% of
the NYSE 100 following suit. Another significant reason
for the use of webcasting is that it provides measurable
returns. There is no more guesswork over how many
and who you have reached. Online technology used in a
presentation can tell you exactly who logged in and for
how long.

Webcasting comes in various forms from the very simple

audio stream with synchronised slides through to multi-
camera video presentations. However, all webcasts
provide the option for interactivity; viewers can participate
online by submitting questions, filling in questionnaires
8dciVXiHbVgih]VgZhdc%-%%-%-,-% or taking part in instant polling.

[dgVc>ckZhibZciHiViZbZci If you want to find out more about how webcasting can
save you money and strengthen your relationships with
investors and to receive information on the NZX listed
company webcast offer, please contact Ali Boswijk on
www.world-television.com ali.boswijk@world-television.com. n

Units in the Smartshares funds have been accepted for

quotation by NZX and will be quoted upon completion of
allotment procedures. However the Special Division which
regulates Smartshares Limted takes no responsibility for this
') offer. Copies of investment statements can be found at '*
www.smartshares.co.nz.
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