WELLINGTON, June 10 (Xinhua) -- A new share trading market, designed as a gateway to the NZX for small- and medium-sized enterprises (SMEs), has been granted a license by the New Zealand government on Thursday.
Commerce and Consumer Affairs Minister David Clark said Catalist Markets Ltd will provide a simpler and more affordable "stepping stone" for SMEs to raise capital. The Catalist market will open for trading on June 21.
"This is a big win for kiwi businesses and it ties in well with the government's focus on securing an economic recovery in the wake of COVID-19. Through Catalist, SMEs looking to grow into larger enterprises have a new means of getting there," Clark said.
"It's also fantastic news for consumers, who will have fresh investment opportunities and greater choice when it comes to diversifying their portfolios," he said.
Small Business Minister Stuart Nash said many early-stage companies would benefit from raising capital but cannot afford the initial and ongoing costs of listing on traditional exchanges.
"For businesses wanting to grow, the alternative to listing is to raise money privately. This can be difficult in New Zealand due to limited access to pools of capital, across both equity and debt markets," Nash said.
Providing another avenue for SMEs to access capital is particularly important in the current economic climate, as New Zealand rebuilds the economy following the impacts of COVID-19, he said.
For affordability, products listed on the exchange will only trade during periodic auctions, rather than continuously as on the NZX. This is intended to reduce costs for issuers and provide more accessible pathway for companies looking to grow, Nash said.