Every few weeks, for over a decade, Brian Gaynor writes the same article in Saturday’s New Zealand Herald.
He was at it again last week in this article.
The storyline goes like this: New Zealanders are poor savers, our capital markets are stunted, there should be more NZX listings, and we need more capital market regulation.
Evidence and experience never change this litany.
As I pointed out in this 2007 article, “the McLeod Tax Review of 2001 found that there was no evidence that New Zealanders are poor savers”, and subsequent research by the New Zealand Institute of Economic Research and others has confirmed that finding.
In its 2009 report the Capital Market Development Taskforce gave no credence to the “New Zealanders are poor savers” mantra.
To my knowledge, Brian Gaynor has shown no awareness of these contrary findings, still less attempted to refute them.
On the other hand, as I noted in this 2009 article, the Taskforce found that “factors that better explain the size of our listed markets include the extent of central and local government ownership, of cooperative structures (such as Fonterra), and of investment in branches and subsidiaries by foreign companies.”
The last one at least is not a negative for New Zealand.
Time and again Brian Gaynor has criticised the Business Roundtable for its insistence on proper justification for regulation. Yet the last government moved to the heavier-handed regulation he favoured in areas such as takeovers, insider trading and disclosure.
But hello! None of this has arrested the trends in our capital markets which he laments again in his latest article. Has it occurred to him that he may have been barking up the wrong tree? Why has he never engaged with opposing views?
Maybe a glimmer of light is shining through. The article says, “Our political leaders must also stop treating Telecom and other large companies as if they are agents of evil.”
As a friend pointed out to me, “Ten years too late, Brian Gaynor.”
He was nowhere to be seen when the last government’s unbundling decision, which the Business Roundtable and the Shareholders Association publicly criticised, wiped perhaps $3 billion off Telecom’s market capitalisation.
The latest article was motivated by the news of the possible merger between the Singaporean and Australian stock exchanges.
My 2009 article noted that in its Progress Report the Capital Market Development Taskforce said that it “would examine performance indicators of the NZX such as capital raisings, total capitalisation, liquidity and transactions costs. It is a pity that this work was not taken further: as recently as October the major multinational Rio Tinto delisted, citing ‘increasing listing costs and reporting obligations.’ “
I also said “The report does not discuss the possible case for the NZX merging with another exchange, as some have advocated, and related public policy issues such as shareholding restrictions.”
One will look in vain for discussion of such issues in Brian Gaynor’s columns. Unless he is finally seeing the light, the New Zealand Herald should hire a market commentator with more informed perspectives.