Offshore ownership hits a five year high

Offshore ownership hits a five year high

* Foreign ownership of the New Zealand equity market increased to 36.3% from 32.6% in 2015. This is the highest level since 2011.

* NZ retail investment experienced the largest drop of the year, falling to 23% from 27%. Portfolio-style investment also fell. However, we observed an increase in strategic stake holdings.

* The IPO run-rate remains subdued, with just three IPOs in 2016. That said, some further new listings resulting from separations of existing assets shows corporate activity remains alive and well in NZ.

* NZ equity market capitalisation currently sits at 41% of GDP, the highest level since 2000. This is still low by international standards, but represents an increase from 2015 (37%).

* NZ's relatively high-yielding equity market has been a key beneficiary of the global 'hunt for yield' in recent years, which has driven the level of offshore ownership to its current level. Ironically, howver, just as interest in our equity market has hit a multi-year high, it appears this underlying thematic is beginning to shift, with central bank stimulatory policies diminishing and more appealing yield alternatives for international investors emerging.

To know more about JBWere, please go to www.jbwere.co.nz

http://img.scoop.co.nz/media/pdfs/1612/JBWere_2016_Foreign_Ownership_Survey_December_2016.pdf

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