Hi-tech private stock market stalled till NZSE plans known

NZInc's mooted Innovation Market is effectively on hold until the shape of the Stock Exchange's New Capital Market, which launches today, becomes clearer.

NZInc's mooted Innovation Market is effectively on hold until the shape of the Stock Exchange's New Capital Market, which launches today, becomes clearer.

"IM is still there and going," says John Blackham, the founder of high-tech foundation NZInc. "We're not prepared to do anything with it just now."

The Innovation Market, based on a Swedish model, is a high-tech-oriented private stockmarket that has been touted for over a year. The NZSE's public NCM, which is due to launch this week, aims to provide simplified stockmarket listing for smaller companies.

Blackham says there was sufficient interest in the Innovation Market, but NZInc will now wait for the rollout of the NCM. Meanwhile, the IM in Sweden has run into problems, he says. As well as Net trading it went into floor trading and cost of that had "started to kill them".

They lost focus though they seem to be back on track now, he says, and NZInc is waiting to see what form the NCM takes. "If it's been structured correctly, we could have probably used that rather than setting up a new trading market."

He still believes an IM will need to be set up in future because of what he sees as flaws in the NCM: companies may be inadequately prepared for listing, the focus will be on funding rather than the company's long-term survival, and having public shareholders stymies quick manoeuvering.

With the IM, Blackham says he is biding his time to see what happens with the capital markets. "There's been a lot of activity in the last year since we started on the venture capital front." He believes "the bubble" of hype rather than substance may burst and drag the whole high-tech sector down with it.

"Investing many millions of dollars in a new capital operation right now would be an enormously high-risk venture."

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