New stock exchange to help grow small businesses
A new share trading market, designed as a gateway to the NZX for small-to-medium-sized enterprises (SMEs), has been granted a licence by the Government.
Commerce and Consumer Affairs Minister, David Clark said Catalist Markets Ltd will provide a simpler and more affordable ‘stepping stone’ for SMEs to raise capital.
“This is a big win for kiwi businesses and it ties in well with the Government’s focus on securing an economic recovery in the wake of COVID-19. Through Catalist, SMEs looking to grow into larger enterprises have a new means of getting there.
“It’s also fantastic news for consumers, who will have fresh investment opportunities, and greater choice when it comes to diversifying their portfolios,” David Clark said.
Small Business Minister Stuart Nash said many early-stage companies would benefit from raising capital but cannot afford the initial and ongoing costs of listing on traditional exchanges.
“For businesses wanting to grow, the alternative to listing is to raise money privately. This can be difficult in New Zealand due to limited access to pools of capital, across both equity and debt markets,” Mr Nash said.
“Supporting SMEs to grow and thrive is a key element in our five point economic plan, with the overall objective of encouraging productive, sustainable, and inclusive economic growth.
“Providing another avenue for SMEs to access capital is particularly important in the current economic climate, as we rebuild the economy following the impacts of COVID-19,” Stuart Nash said.
For affordability, products listed on the exchange will only trade during periodic auctions, rather than continuously as on the NZX. This is intended to reduce costs for issuers and provide more accessible pathway for companies looking to grow.
The Catalist market will open for trading on 21 June 2021.