WFE Focus Team , London , World Federation of Exchanges | Dec 2017

 

We are delighted to feature Mark Peterson, CEO of NZX, who takes us through the first few months as CEO, and looks at the key role the exchange plays within the country's capital markets system.

Mark, you’ve been in the CEO role since April 2017. How have the first few months gone, and how are you adjusting to the new role?

It’s certainly been a busy year for the team at NZX! Last month we updated our shareholders and the New Zealand market on our refreshed strategy and delivery plan. We have spent the past five months comprehensively reviewing our business, this included stakeholder interviews, rigorous internal analysis, and an analysis of global peers and market disruptors, to gain an in-depth understanding of the initiatives needed to keep growing the New Zealand market.

As I look back on 2017, even though it has been busy, it has been an extremely rewarding year for NZX. The market performed well with the S&P/NZX 50 index up more than 18% so far in 2017, while our global dairy derivatives market has become a true point of difference for NZX and we are on track to achieve record growth targets in 2017. Retail investment in our Smartshares Exchange Traded Funds business has also been recorded, with the number of applications in the first half of 2017 exceeding the entire 2016 total.

In addition to this, we announced several initiatives to develop the operation of our market, including a review of NZX’s equity market structure, with the likely outcome to consolidate our three equity boards into one. This consultation process will run alongside the first holistic review of NZX’s Main Board Listing Rules since 2003 – phase one on the review finished last month and engagement from the market has been very high.

It was also positive to see that our strategy was well received. I am looking forward to working with the team to build on the momentum created during this review as we continue to put our strategy into action next year.

In the time since you’ve been CEO, you have already overseen a major review of the exchange, and announced an exciting new strategic direction and ambitious five-year delivery plan. Please could you tell us more about this?

As New Zealand’s exchange we are passionate about working with our customers and stakeholders to grow the markets which NZX operate, these currently include cash, derivatives and energy markets. These markets generate wealth integral to New Zealanders’ prosperity, and New Zealand companies getting ahead.

Our refreshed strategy is about refocusing on our core cash market, with a view globally, and a clear focus on the customer. We are also committed to growing opportunities aligned to the New Zealand advantage, such as our dairy derivatives and environmental markets. As well as focusing on the core cash market, NZX needs to offer a broader range of products to drive growth. This is something several global exchanges are already doing well, innovating and diversifying into new markets that are connected to their core, and extending product sets from the core to create new revenue opportunities, such as data, a large revenue driver for many exchanges. As part of our strategy NZX will turn data into meaningful insights that help drive decisions and sales for our customers.

In addition to this, we will continue to drive growth our Exchange Traded Funds and KiwiSaver businesses which allow us to connect with, and grow the number of retail investors in the New Zealand market.

How would you describe NZX’s role within New Zealand’s capital markets?

As part of our strategic review we commissioned a piece of work that assesses the value of the public market to the broader New Zealand economy, and NZX has a much larger economic footprint than most people realise. The total Gross Domestic Product contribution of companies listed on the S&P/NZX 50 is more than $24 billion and there combined revenue total of more than $61 billion. These companies’ employee approximately 96,300 workers, and create a further 33,800 jobs in the closely related financial sectors, reinforcing that a strongly performing NZX contributes significant value to New Zealand, driving economic, social and environmental sustainability for our country.

As a regulated exchange, we play a pivotal role in connecting investors with investment opportunities while maintaining the operation of fair, orderly and transparent markets for our customers. A healthy and productive exchange will continue to generate jobs and wealth for New Zealanders and New Zealand companies.

As part of our strategy work it struck us that NZX’s strategic direction was naturally grounded in a purpose that extended beyond our own business as a market operator. As such, 2018 will us increase our efforts to promote New Zealand’s Exchange internationally and the benefits of listing on our market.

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