NZX: Capitalising on opportunities in a testing environment

By: The WFE Focus Team Dec 2021

Name: Mark Peterson

Title: CEO, NZX

The pandemic has brought many changes to the way we work. In your view, what changes are here to stay that will shape the workplace of the future? 

In my mind, the pandemic has highlighted several important elements for economies and businesses. Firstly, for business owners, it has placed a spotlight on the importance of access to capital. Whether it is in a time of need or a time of opportunity, the importance of access to equity capital has never been more critical.

Many New Zealand businesses have relied too heavily on private capital sources or bank funding and there has probably been too much of a tilt to debt over equity. It has been shown more recently that these sources are not always there for businesses. For the price of good market disclosure, the public markets offer businesses access to much greater pools of equity or debt capital, and these sources have been well used over the past two years. I expect this to continue.

In addition, the pandemic has forced businesses to rethink the ways they operate. With physical movement restricted, businesses had to be agile to create an effective operating environment for their staff and, similarly, they had to rethink how they connect with their customers and create opportunities. Innovation will remain incredibly important in this regard and technology is playing a much bigger part in ensuring personal connections are maintained. With that comes a new set of risks, and these need to be carefully thought through and managed.

What do you see as the biggest challenges and opportunities for your exchange in the year ahead? 

Our exchange has many opportunities in front of it. We are in growth mode and we see a strong pipeline of new issuance, liquidity growth, increased awareness of the NZX market, and the data and information that goes with that. In addition, we operate a passive Funds Management business and a Financial Advisor platform business, both of which have tremendous growth opportunities in front of them. The key thing for us is to deliver on the opportunities within the challenging environment that has been created by the pandemic alongside the increased levels of regulatory scrutiny. This has increased significantly the pressure on our teams, and managing the balance of expectations of our people is incredibly important.

What was your most memorable moment this year as a leader?

The workload on the team at NZX has been phenomenal this year. We wanted to continue to deliver on our growth objectives, we upgraded our trading system, we continue to mature our technology practices (many of which are under increased scrutiny from the regulator), we have launched a very innovative strategic partnership with the Singapore Exchange for our Dairy derivatives contracts, we have also partnered with the European Energy Exchange to launch a carbon auction platform in New Zealand, we have been appointed a “Kiwiaver Default provider” by the New Zealand government, our Funds Management business has made one acquisition, and we have onboarded more than $3 billion of funds under administration onto platform business – all achieved in a challenging environment. The delivery levels throughout the year from the team make me tremendously proud.

What are three key industry themes you will be focused on in 2022?

My view on the three areas are: continuing the growth momentum under greater regulatory scrutiny and in an environment of greater risks, particularly cyber risk and labour market challenges.

Tell us one thing that will change in 2022 and one thing that won’t?

Throughout these two years, I have been very conscious of the work and personal pressures that are on our people and we need to continue to do everything we can to support our teams. We will also continue to work very hard on creating the right operating environment and culture for our staff. I do believe in the simple things, which is if you create the right environment for a very capable and supportive team, they will look after your customers, which will encourage more customers to join, which in turn will look after your shareholders.