Govt savings bodies near saturation in NZ shares

Government pension and savings funds collectively have invested about as much as they can in New Zealand shares.

Government pension and savings funds collectively own more than 5 percent of 47 companies listed on the NZX and more than 10 percent of 17 companies.

The analysis of combined market power of Accident Compensation Compensation, New Zealand Super Fund, Government Superfund and National Provident Fund is disclosed in an annual portfolio report by Treasury’s Crown Ownership Monitoring unit.

The level was not excessive but there was limited scope for more investment, given the size of the NZX, the report said.

“This means CFIs would need to look at private market opportunities in which to invest or move to a more passive approach in investing in New Zealand equities.” . . .

New Zealand pension and savings funds invest  overseas which is prudent as it spreads the risk. But the decision to invest overseas or where to invest here should be a positive one, not because there isn’t sufficient scope for investment in domestic shares.

The partial float of state-owned energy companies will increase opportunities for investment in New Zealand for institutional and private investors.

The report is here, analysis of investment in the NZX starts on page 40.

One Response to Govt savings bodies near saturation in NZ shares

  1. Neil says:

    The NZX needs plenty of new listings as the number of substantial companies have merged or delisted.Gone are the old insurance companies,banks,utlities and other core businesses. Hence investment opportunities are declining.
    There is plenty of money out there,especially retiree savings. Bring on the floats of SOE’s but their general poor returns don’t thrill me greatly. There needs to be some private sector belt tightening in those operations.
    I talked yesterday in Sunday Post about misinformation being prevalent. We need savings but the Labour and Green parties are hardly shinmg models of financial sense.For example the printing of money which would unleash the scourge of rampant inflation. They are also indoctrinating the public with so much nonsense about the ownership issue

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