Should the asx & nzx combine

[POSSUM THE CAT]

Anybody else like to disscuss this. http://www.stuff.co.nz/business/industries/3043426/Markets-merger-vital-to-survival Article on Stuff. My opinion the sooner the better

[macduffy]

If a "merger" meant that ASX stocks would be traded on the NZX a couple of hours before Aust and all NZX stocks being traded in Aust then I'd be all for it.

If, however, it resulted in ASX merely owning the NZX with no change otherwise then I wouldn't see the point. I wonder if there is another agenda though. Such as taking out the NZX before it's able to develop its planned Australian operation?

;)

[Nevl]

If a "merger" meant that ASX stocks would be traded on the NZX a couple of hours before Aust and all NZX stocks being traded in Aust then I'd be all for it.

If, however, it resulted in ASX merely owning the NZX with no change otherwise then I wouldn't see the point. I wonder if there is another agenda though. Such as taking out the NZX before it's able to develop its planned Australian operation?

;)

yeah agree Macduffy. The Aussies will play as dirty as possible and try to prevent the NZX from getting any foothold. I cannot think of any instance where a take over of a NZ company by an Aussie has being beneficial for NZ. Better that NZX gets those niche markets up and running.

[CJ]

If a "merger" meant that ASX stocks would be traded on the NZX a couple of hours before Aust and all NZX stocks being traded in Aust then I'd be all for it.
If it was this, it would be great! If no change, then what is the point.

[POSSUM THE CAT]

Better Imformation & more of it from ASX. Also if you go into the news section of Direct Broking with the NZX mostly you just get that the NZX has received a copy of the notice. With the ASX you get all the imformation straight off. Also ASX web sight is a lot better to use than NZX & you do not have to log in every time.

[COLIN]

As far as I'm concerned the NZX is becoming increasingly irrelevant. I have gradually been shifting the majority of my sharemarket involvement to the ASX - there are far greater opportunities over there. And just look at the NZX performance today - the Dow moves up by 2%, the ASX by 1.5% ................. and the NZX remains flat! That says it all.

[POSSUM THE CAT]

Colin That was my point. Under present Management NZX is irrelevant. So why not combine the two it could not be any worse and should be cheaper to.

[GR8DAY]

.....cudnt agree more Colin. Today says it all re: NZX. Positves all over the globe but dear old NZ goes nowhere once again.....tries to make a gain only to give it all up an hour or two later. Very Frustrating at times...read MOST of the time!

[beacon]

About time. NZX notices are a disgrace

[Nevl]

.....cudnt agree more Colin. Today says it all re: NZX. Positves all over the globe but dear old NZ goes nowhere once again.....tries to make a gain only to give it all up an hour or two later. Very Frustrating at times...read MOST of the time!

So the market didn't go up today? Who cares that's not it's job. It's job is to provide an exchange. The fact that it never dropped as much as other markets around the world in the crisis is also bad? Not to mention that for many years I think 2001 to 2004 the NZX was one of the top performing markets. Sorry can't have it both ways.

[POSSUM THE CAT]

Nev was the present Management in control then. Every year for a considerable period the costs for small sharetrades has gone up and the service down. Why does Need to charge $29.90 for up to $15000.00 on NZX and only $ 29.00 up to $30000.00 on ASX. Nobody want to trade on the NZX it is to expensive and imformation is poor.

[Casa del Energia]

If all else is equal, it would be great to have all quotes on the one board - that would be so much simpler than following two markets at once.
Even better if the NZX took over - then maybe they could force a re-design the insanely over busy ASX web pages.
How about a common currency too - so sick of paying exchange for what is really just local.
Could combine Cricket teams as well, then we might actually win a test match one day. (Pakistan match noted though).

[karlos]

Agree Casa, common currency then I reckon the exchanges would naturally follow suit and combine:)

[Nevl]

Agree Casa, common currency then I reckon the exchanges would naturally follow suit and combine:)

and end up with asset bubbles like Ireland and Greece as we lose the ability to set our own interest rates and make adjustments for our economy.

Nah bad idea. I know that overseas speculators think our economies are the same but as Bollard has said we are not. Also Aussie has just upped their interest rates. Would that really be good for NZ? Seriously what a dumb idea.

[bermuda]

I wouldnt support a merger. Let the NZX be managed by the ASX but please dont merge them.

For the lfe of me I just cannot understand how that Weldon is on such a big salary.

In fact I reckon all top CEO's salaries should be capped at about 350k. That's about what the PM gets and that job is full on.

[macduffy]

Agree Casa, common currency then I reckon the exchanges would naturally follow suit and combine:)

Now that would really be the last straw for our primary exports. An Aussie dollar that's stronger than ours so as well as losing the 20% edge for exports to Aust, NZ would also be another 20% worse off against the USD.

:rolleyes:

[beacon]

In fact I reckon all top CEO's salaries should be capped at about 350k. That's about what the PM gets and that job is full on.

Oh, that is too generous for what they do. There is no dearth of local talent. Bring it on...
We have nothing to lose but inefficiency, unproductivity and pathetic quality.
Also, let's get rid of Fund managers who charge on asset bases, rather than on profit generated...

[Casa del Energia]

and end up with asset bubbles like Ireland and Greece as we lose the ability to set our own interest rates and make adjustments for our economy.

Nah bad idea. I know that overseas speculators think our economies are the same but as Bollard has said we are not. Also Aussie has just upped their interest rates. Would that really be good for NZ? Seriously what a dumb idea.


The North and South Island have differing economic bases, Tasmania and WA are further apart then NZ and Aust, The NZ pound and Aust pound were once kept in parity. Differences always exist and there would be adjustments - - each state joining the EU had an adjustment period but it makes so much sense to have aligned markets that it would be now insane for (e.g.) France or Germany to leave the EU.

On the other hand – the Aussies don’t want us anyway – I heard on the news today that an Aussie MP wants to restrict Kiwi immigration. (I don’t want to live there anyway – the beer tastes funny).

[Nevl]

The North and South Island have differing economic bases, Tasmania and WA are further apart then NZ and Aust, The NZ pound and Aust pound were once kept in parity. Differences always exist and there would be adjustments - - each state joining the EU had an adjustment period but it makes so much sense to have aligned markets that it would be now insane for (e.g.) France or Germany to leave the EU.

On the other hand – the Aussies don’t want us anyway – I heard on the news today that an Aussie MP wants to restrict Kiwi immigration. (I don’t want to live there anyway – the beer tastes funny).

Don't worry the French and Germans are also have monetary issues with the Euro as well. But nothing like the problems with Italy and Spain of course. The Aussies would lose more than we would fro ma restriction on Kiwi immigration. Kiwi immigrants to Aussie are the highest earning immigrant group in Aussie. Anyway Aussie is just building up issues water, drought, the resource curse, infrastructure problems. I will stick with NZ too.

[skeet]

I cant see how it would work in regards to tax implications, unless we were just to merge that to but theres probably more chance the Wallabies and All Blacks will join forces!

[CJ]

I cant see how it would work in regards to tax implications, You would continue to be taxes as you are now - residence and source.

They already have issues re which state you are in so NZ would just be its own state (without a contribution to the federal government)

[macduffy]

The discussion has widened from " should the ASX and NZX combine" - which to my mind means an effective takeover of the NZX by the ASX - to "some form of economic unity".
Getting back to the original point, what would be the advantages/disadvantages of the NZX being controlled and operated by the ASX? Better, cheaper information and trading? Wider trading hours for both NZ and Aust stocks? What else?

[Casa del Energia]

I cant see how it would work in regards to tax implications, unless we were just to merge that to but theres probably more chance the Wallabies and All Blacks will join forces!

Nevl:
True – and Kiwi workers are well regarded. And it costs us fortune to put people through school and often university – just to have them drive Aussie commerce.
But coming back to subject – surely combining stock exchanges would be a good first step to a common “NewAust’ market since such economic alignments are difficult and must necessarily be done in a long series of small steps.

Skeet:
To a certain extent, tax is tentatively aligned in that we ‘had to’ drop our company tax rate so we didn’t get too out of kilter with Aussie. No one rioted over that – so even more alignment would not be too difficult politically … and make my life a bit more straight-forward.
Maybe (and this is just thinking off the top of my head) – a first step could be achieved via a special ‘virtual’ transtasman tax zone where residents from either side of the boarder can designate income as being from this ‘zone’ - thus income from equities held on the ASX and NZX receive the same treatment.

[Casa del Energia]

The discussion has widened from " should the ASX and NZX combine" - which to my mind means an effective takeover of the NZX by the ASX - to "some form of economic unity".
Getting back to the original point, what would be the advantages/disadvantages of the NZX being controlled and operated by the ASX? Better, cheaper information and trading? Wider trading hours for both NZ and Aust stocks? What else?

If it's only combined markets - not much else. But cheaper trading, wider hours, simpler operation of a portfolio would be good enough.

I know it wrankles a lot of people that the major banks here are owned and operated trans-tasman - but the fact that they are gives us better performance and more 'weight' in the wider world markets.

As an aside -(or an interesting 'for instance') my bank is the ANZ and last month, I had occiasion to get some cash from an ANZ ATM... in Port Vila - How convenient is that?

[beacon]

franking and imputation credit issues are easily sorted if there is political will on both sides ...
without the wider economic cooperation, the deal would be just another kiwi operation gobbled...

[macduffy]

franking and imputation credit issues are easily sorted if there is political will on both sides ...
without the wider economic cooperation, the deal would be just another kiwi operation gobbled...

Pretty much my sentiments, beacon.

We might however get a better deal on information, market depth etc where the ASX seem to be more than a bit ahead of the NZX.

[Nevl]

Pretty much my sentiments, beacon.

We might however get a better deal on information, market depth etc where the ASX seem to be more than a bit ahead of the NZX.

But considering that the Aussies after about 20 years still won't allow Kiwis to claim Franking credits on Aussie shares as well as numerous other issues where Aussie practise the one rule for us and another rule for you. I cannot see any positive for NZ in any such move. Having said that the NZX is not perfect. But still Aussie??????? Come on get real.

[macduffy]

But considering that the Aussies after about 20 years still won't allow Kiwis to claim Franking credits on Aussie shares as well as numerous other issues where Aussie practise the one rule for us and another rule for you. I cannot see any positive for NZ in any such move. Having said that the NZX is not perfect. But still Aussie??????? Come on get real.

I don't think that anyone is actually advocating that the ASX should take over the NZX, just discussing the pros and cons.

The issue of franking credits/imputation credits is as much NZ's fault as Aussie's. Neither govt wants to give up the revenue that mutual recognition of these tax credits would involve.

[Nevl]

I don't think that anyone is actually advocating that the ASX should take over the NZX, just discussing the pros and cons.

The issue of franking credits/imputation credits is as much NZ's fault as Aussie's. Neither govt wants to give up the revenue that mutual recognition of these tax credits would involve.

No Aussies get our imputation credits but as with open skies and apples refuse to implement the deals that we signs to allow the same rights to Kiwis.

[Lizard]

NZ investors need to take some responsibility for re-vitalising the NZX. It's a two-way street of course, but the cynicism of NZer's towards their own companies also means there is little for a good company to gain from listing here. Companies are listed for access to capital, not to give out free lunches. This cynicism is seemingly becoming a self-reinforcing, downward spiral.

There have been years where the NZX provided better returns than the ASX and - provided we can retain it - there will be again. Take a look at the rapid change in our trade figures driven by the move in our ratio of oil imports/exports - perhaps we should be careful about taking our eye off our own sharemarket at this point.

[macduffy]

No Aussies get our imputation credits but as with open skies and apples refuse to implement the deals that we signs to allow the same rights to Kiwis.

They don't get our (NZ) imputation credits but occasionally a company such as FBU pays enough Aussie tax to give Aussies some imputation credit.

Occasionally its worked the other way too, eg NAB on occasion has distributed modest NZ imputation credits from NZ tax paid from the BNZ business. Might we hope for some more of this? :D

[CJ]

They don't get our (NZ) imputation credits but occasionally a company such as FBU pays enough Aussie tax to give Aussies some imputation credit.Under triangulation the way it works is that a company that pays both IC and FC can attach both to a dividend. The Aussies use the FC and the NZers use the IC.

If the Aussies agreed, I believe the NZ government would jump at the opportunity for mutual recognition.

However, I think you are all getting sidetracked with the tax thing. Each company tax affairs would still be determined by the country it is resident in. All a combined exchange would do is make access to Aussie stocks easier for NZ and vice versa. ie. one brokerage account and no need to deal in two currencies. Additional benefits would flow from a single currency (there would be no arbitrage as there would no longer be a need for a AUD and NZD price) and common tax rules would make compliance easier and encourage investment into the other country (ie. FC or IC are currently worthless to the other country).

So I think there are two questions:

Should the ASX and NZX combine; and
Is combining the exchange gong far enough or do we also need a common currency and/or tax rules

[Casa del Energia]

........................
........................
So I think there are two questions:

Should the ASX and NZX combine; and
Is combining the exchange gong far enough or do we also need a common currency and/or tax rules


Sounds like a voting call.
1. Yes. 2. Yes and (common tax rules) , Yes.

(I would like to make it clear that I would still strongly hold to separate sovreignty)

[sharer]

Sounds like a voting call.
1. Yes. 2. Yes and (common tax rules) , Yes.

(I would like to make it clear that I would still strongly hold to separate sovreignty)

I think the tax & currency rules neatly proposed as questions by CJ would necessarily imply a loss of separate sovereignty to NZ.
Or equivalently, without loss of NZ sovereignty, neither of those two propositions could possibly happen. (IMHO).

[POSSUM THE CAT]

Should the NZX at least use the Ex & Record date being 3 days apart for dividends & rights issues then everbody would no exactly where they are like the ASX

[Casa del Energia]

I think the tax & currency rules neatly proposed as questions by CJ would necessarily imply a loss of separate sovereignty to NZ.
Or equivalently, without loss of NZ sovereignty, neither of those two propositions could possibly happen. (IMHO).

No, not not all.

The ability for a NZ goverment to separately legislate in new bill or amendments to bills would be restrained, yes - as are the EU countries now - but sovereinty would not be lost: The French don't vote in the UK general elections, the Queen has no power to dissolve a French parliament.

[macduffy]

I don't know about a narrow definition of "NZ sovereignty" but sharing a common currency with Aust (inevitably the AUD by that or any other name) would mean having a currency that reflected the policy settings of the RBA, unless anyone seriously believes that NZ with its 4m population would have anything more than minor influence.

[POSSUM THE CAT]

If you started With an Anzac Dollar or Preferablly A Pacific Dollar that was legal tender in both countries and some of the Pacific Islands and local currencies were set against it. So each individual currengy could move seperately as needed. As was the Euro at the start. Britain Still retains the pound but the shops must accept Euros To Exchange Rates could be set Daily or even Hourly for bigger items.

[macduffy]

If you started With an Anzac Dollar or Preferablly A Pacific Dollar that was legal tender in both countries and some of the Pacific Islands and local currencies were set against it. So each individual currengy could move seperately as needed. As was the Euro at the start. Britain Still retains the pound but the shops must accept Euros To Exchange Rates could be set Daily or even Hourly for bigger items.

There's really not any point to having a "Pacific dollar" if local currencies are going to be retained and are going to float against it, and amongst themselves. The whole point of a common currency with Aust is to cut out these annoying currency fluctuations that make life difficult for exporters, although why anyone would want to give up the existing 20% advantage against the AUD is a mystery to me!

The GBP/Euro situation is a bit of an anomaly and is the result of Britain sticking to the Pound while at the same time being a member of the European Common Market. As far as I'm aware, the French franc, German DM etc aren't around these days.

[POSSUM THE CAT]

Macduffy Those european currencies were around for many years in the initial stages. You have to crawl before you walk. As a phase in you could decide to keep your own holdings in pacific dollars.

[beacon]

one brokerage account and no need to deal in two currencies. Additional benefits would flow from a single currency (there would be no arbitrage as there would no longer be a need for a AUD and NZD price)

The banks will lobby strongly against that, as they'll lose a very lucrative income stream. I don't have the stats handy, but that will hurt their hedging, treasury and forex trading desks heaps. Expect strong resistance from that cartel.