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.