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Sharemarket listings in foreign hands

NZ Newswire logoNZ Newswire 6/12/2016 Fiona Rotherham

Foreign ownership of companies listed on the New Zealand sharemarket has risen to 36.3 per cent, its highest level since June 2010, according to JBWere's Foreign Ownership Survey.

However, ownership by local retail investors fell 4 per cent, hitting 23.2 per cent, its lowest level in four years.

Portfolio-style investment also fell.

Bernard Doyle, head of JB Were's investment strategy, said the increase in foreign ownership in recent years has been driven by institutional fund managers hunting for yield in a global low-interest rate environment.

"New Zealand's high dividend yield has been increasingly attractive by doing nothing - staying at around 5 per cent - when all other tides have been going out," he said.

A secondary driver of offshore interest has been New Zealand's political stability, notwithstanding Monday's resignation by Prime Minister John Key.

Foreign ownership is likely to have peaked though, with the New Zealand sharemarket looking less appealing as international interest rates rise and central bank stimulatory policies diminish, he said.

"It will be much harder to stand out for those institutional investors than it has been."

The survey showed the run-rate for initial public offers remains subdued with just three IPOs this year, the same as last year but well down on the 12 in 2014.

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