A number of trends that could undermine the effectiveness of capital markets and have long-term consequences for the country’s wealth if left unaddressed:

• A KiwiSaver regime that encourages saving, but fosters investment predominantly in lower-growth assets and has limited exposure to private markets.
• A large number of New Zealanders who are not actively participating in KiwiSaver.
• A two-tier public market that is working well for the larger companies, but is less liquid and effective for smaller companies.
• A public market that is struggling to attract new listings.
• Private markets that are working well and growing, but not necessarily serving the full range of New Zealand investors, nor the full range of investment stages.
• A sound regulatory regime, albeit with areas which could be improved to assist the flow of capital.

Recommendations:

• Raise the level of individual participation and engagement in capital markets.
• Offer more choice of investment for individuals, both within KiwiSaver and more generally.
• Grow the base of companies that can access the public capital market, reduce the barriers to listing where possible and increase motivation for public companies to remain listed.
• Grow the private capital ecosystem in New Zealand.
• Use the capital markets to fund infrastructure in New Zealand.
• Create greater wealth for New Zealanders.