Taking Stock 14 May 2026

INVESTORS are again being wooed by the potential of an NZX listing for the state-owned bank, Kiwibank. A listing could occur within a year.

Finance minister Nicola Willis has instructed Treasury to assess the options for the bank, ostensibly to enable it to grow and take market share from the Australian banks.

The more pressing motive is to raise a billion or two of capital for the Crown, enabling it to reduce national debt and offset some of the rising cost of servicing debt. 

Willis is well aware that wide public acceptance of selling off some of an asset that the media and the left regard as sacred is the commercially logical response to our horrific debt level.

Set up to be “the people’s bank” by long-time left-wing politician, the late Jim Anderton, Kiwibank has morphed from a low-cost bank for social welfare beneficiaries into a fledgling commercial bank with a significant mortgage-lending portfolio, pricing its services at or around the same levels as its Australian competition.

The “people’s bank” for a while was TSB. In 2026 this title, if it is allocated at all, is more likely to be the tiny Co-operative Bank.

Willis will know that NZX is keen to host credible new listings, just as Key was aware of that when he campaigned on selling down to 51% the Crown’s holdings of the power companies, Genesis, Mighty River (now Mercury) and Meridian.

Hopefully Willis will have learnt from Key’s errors and will not replicate them.

If she sells some (or all) of Kiwibank, hopefully Willis will not allow the lead brokers to feed the stock to institutions with no rules on their exploiting the market.

In the first Key-authorised sale, Goldman Sachs was appointed a co-lead with no constraints. It allocated large sums to local and global institutions, forcing hefty scaling on those of the public who were in a position to take up a shareholding.

These institutions were aware that Genesis and Meridian were in line for sale so bought up large, but in the days after listing sold the shares for an immediate profit, gaining some handy trades (and more brokerage) for the broker.

That led to the Mighty River price collapsing by 20%, where it sat for many months.

While this was an opportunity for retail investors to buy cheaply, the reality was that many were squirreling money for the Genesis and Meridian offers.

The result was a depressed Mighty River price, which in turn led to sharp reductions in the value of Genesis and Meridian, unarguably costing the Crown an enormous sum, certainly many hundreds of millions. Genesis and Meridian were forced to reduce their listing price because of the price collapse of Might River.

Goldman Sachs - 1, Key and the Crown - 0.

What Willis should do is what commonly happens overseas. The lead brokers are paid tens of millions but are required to support the market after the listing and are prevented from using the lead’s access to the stock to sugarcoat their relationship with institutional clients. 

If Kiwibank is to be listed, the shares offered should focus on retail investors, not institutions, despite the early plotting of institutions to seek prime position.

It seems obvious to me that institutions and pension funds etc. would be buying the stock to meet their promises to mirror an index, whatever the price.

Any focus on discounting the price should be aimed at NZ retail investors; the likes of Sharesies’ million clients, who might rustle up a thousand dollars each, might result in a billion dollars of demand from the largely young people who are seeking a pathway to home ownership (in most cases).

Willis will not want to follow the erratic processes used by governments of both hues in handling the sales of social asset, Air New Zealand. The Labour government sold a majority stake in Air New Zealand to the short term trader, Brierley Investments in 1989. The price was extravagant and highlighted the lack of long term strategic thinking of Brierley, a company utterly inept at long-term analysis.

By 1994 Brierley was buying for $4.55 per share a 5% additional holding in Air NZ from the Japanese airline. The Japanese pocketed a $49 million profit, having bought at a cheaper price, earlier.

In 2001, the hapless Labour government was injecting a mere $885 million to cover the airline’s errors and losses, largely stemming from a crass attempt to buy Ansett, against the wishes of Australian unions.

By 2004, Brierley had worked out that Air New Zealand was a social asset unable to make profits reliably. It realised that many of the airline’s offerings were to meet political and social objectives ( i.e. routes to isolated cities). Brierley asked Goldman Sachs to sell its remaining Air NZ shares to (unwise) institutions, when the share price was around 43 cents. 

I do not know how many hundreds of millions Brierley had lost. Nor do I know why institutional buyers from Brierley figured that the airline would build consistent profits while performing political and social sources.

Since then, the Crown has invested more money; shares have again been sold and bought back.

Today the institutions are not present to any significant extent on the share register. They have learned.

The Crown is the rightful controlling owner, offsetting inevitable losses against the value of social services (and happy voters).

Regrettably youngsters, who receive no advice but buy on price or on profile, are the biggest block of shareholders on Air NZ. 

One shudders at how much they have lost.

Sharesies reports Air New Zealand is its clients’ most favoured stock. The shares are priced today at around 43 cents and pay no dividend, while the company forecasts losses of hundreds of millions. Air New Zealand’s sole objective now is to survive and provide services to New Zealanders. The Crown will inevitably pay.

If Willis tried to sell the Crown’s holding there would be no orderly market, just as would be the case if she tried to sell the NZ Post, or the national television stations, or KiwiRail.

In contrast, Kiwibank is an established profit-making asset, held back by the government’s inability to sell without political resistance, restrained by the Crown’s unwillingness to inject a billion or two of capital, and not helped by the political input to governance, sub-optimal for any organisation.

Willis needs Treasury to support a sell-down, or sell-off, that might persuade voters that she is acting wisely.

NZ does not need a Crown-owned bank. NZ needs to reduce debt.

The Reserve Bank has already shown it can and does regulate all banks, whatever their sovereign origin, even if the RB for many years has not wanted to monitor the banks. It has long claimed that its expertise and its prioritisation does not cover daily supervision, as highlighted by the failures of the RB and Treasury to penetrate the lies told by the guaranteed finance companies that exploited the 2008 Crown Deposit Guarantee Scheme.

If Willis can raise a billion or two from largely NZ retail shareholders she will be doing a great favour to New Zealand, and providing perhaps 100,000-200.000 New Zealanders with an asset that should grow in value.

She should lay down very specific rules about who manages the sales process and who should get primary access to the shares.

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THERE are at least two more potential NZX listings that would benefit retail shareholders. 

One that is regularly discussed is the potential listing of the financial intermediary, Sharesies, whose growth trajectory far exceeds most imaginations as far as I can discern.

Sharesies set out to be a very low-cost technology-driven platform for financial securities, charging fees far less than cost while harboring ambition that eventually its growth would lead to profits. 

It funded itself from private equity investors, like Milford, and individuals with significant wealth. It would raise capital regularly at higher prices than the original price, so grew in estimated value until it reached an alleged value of $500 million, while still recording losses.

Today it aspires to achieve a theoretical value of a billion, making it worth more than the big broking firms, which make tens of millions of net profit after tax, attract the wealthy end of town, and attract the executive and staff that are well versed in financial markets.

Given Sharesies was founded by “tech” people with no or little relevant financial market knowledge, this is an astonishing and highly laudable achievement right up beside Xero as a great NZ technology story.

It says it has nearly a million clients with an average wealth of around $4000.

It has been greatly helped by attracting much media commentary, presumably reflecting support from those in the media who are Sharesies’ clients.

Sharesies has added a range of extra services, the most recent being a robotic advice service. It offers a range of exchange traded funds to Kiwisaver people.

The original shareholders who took the plunge and worked hard and successfully retained small holdings will emerge as genuinely wealthy people if a listing occurs and if there were no escrow conditions preventing them from selling their shares.

My applause for them is sincere.

An NZX listing would add to the NZX new market capitalisation by at least a billion dollars.

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A SECOND potential listing is maybe more valuable and seemed just as unlikely as Sharesies a decade ago.

The Auckland-based finance company Avanti has grown to the size of a decent-sized bank, focusing on lending on flexible home loans, car loans, personal loans, small business loans and now commercial property loans.

Its debt collection record implies strong lending disciplines.

Its profitability implies pricing loans wisely.

Its cost of funds displays access to wholesale markets which are always more discerning than the likes of retail deposit taking companies.

Its asset growth is extraordinary, now exceeding four billion dollars.

It was founded in 1989, has several hundred employees, and probably makes net profits after tax exceeding $50 million.

It has achieved all of this under the leadership of Glenn Hawkins, now one of the Auckland wealthy group but one who wisely does not engage much with the media and does not boast about his wealth.

He would know the media might not judge him on his commercial and business skills, and proven success. Media might prefer to focus on his controversial father, Allan Hawkins, once (in the early 1980s) the managing director of CBA Finance, in New Zealand, a bank-owned respectable entity.

Hawkins had left CBA Finance to establish the ill-fated Equiticorp Finance, employing young people whose moral compass was often not well-set.

Hawkins involved himself in various equity deals which eventually destroyed Equiticorp, including a deal to buy NZ Steel, which was found by a High Court to have been illegally structured by Treasury and Equiticorp, leading to a $300 million (plus) payout by the Crown to Equiticorp debenture investors.

Hawkins went to Ohura Prison, emerged and sought to re-establish himself in business, but eventually accepted he had no place in business, hounded, quite naturally, by the media. He would now be in his 80s.

Meanwhile his son Glenn was building Avanti Finance on much stronger principles than Equiticorp ever established.

Nor did young Hawkin provide bows and arrows for any cowboys who wanted a role in his company. He has built an admirable business. Avanti has grown in reputation, in performance, and in creditworthiness.

It would now be an excellent addition to the NZX, and would no doubt consider a listing if this was needed to accelerate its market dominance.

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THE tiny Central Otago town of Tarras would probably be unknown to 90% of New Zealanders but for the plan to build Central Otago’s major airport there.

Tarras has a few hundred residents, many of whom are crib owners. It is a nice, tiny rural town, with a golf course inhabited by sheep, an old community hall and a few retail shops.

Somehow a Wellington visitor with a crib in Tarras persuaded some locals to appoint her to the role of heading the small group of residents who opposed the airport proposed by Christchurch International Airport Ltd, which had acquired land for the project.

The visitor, an environmental activist Suze Keith, generated enough heat that CIAL deferred its plan.

Keith in this defacto spokeswoman role has since moved to the latest issue, a proposed gold mine about 20 kilometres south of Tarras.

A Victoria University academic with some environmental consultancy role at the Greater Wellington Regional Council, Keith is a skilled driver of support in Wellington’s left wing media and a skilled driver of social media content.

She manages the media very well.

I am unsure why any council would ever employ an environmental activist. If I were chairman of such a council, I would seek knowledge and independent thinking but not heavy single-minded input.

Yet one can tip one’s hat to her skill in exploiting the media.

This exploitation now has reached a head.

Two quite controversial characters have been engaged and described by her group as “independent experts” to participate in expert panels, providing the Fast Track Panel with input as the panel has a first pass at approving, deferring or denying the Santana gold project consent. One, a woman, is a genuinely experienced landscape architect, the other is a tourism lecturer.

Santana’s legal counsel is now seeking to have those experts “outed” as activists who allegedly indulged in anti-mining chit chat on social media, reflecting ideology that might debar them from any panel definition of an independent expert.

The social media used usually allows pseudonyms, though in these “expert” cases pseudonyms were not used.

If the challenge to their independence succeeds, NZ might make the first step in addressing this modern curse – the use of pseudonyms in social media, facilitating conversation best described as dangerous codswallop, delivered usually by halfwits. Hopefully, one day only real names will be used.

I refer here to the likes of media and social media discussion about the 10,000-year life of a storage facility of rock topped by a shallow layer of water at the Santana site. Such discussion is nonsensical as the facility outlives mining by weeks, not years, and is no more a 10,000-year threat than a humpback whale swimming around Wellington Harbour.

Within months of the end of mining the facility there will be a hill covered in pasture greatly more stable than most hills, given its structural support of concrete, steel, and crushed rock.

If, as Santana claims, “independent experts” are just an extension of an activists’ group those “experts” most certainly should be outed for what they are.

The panel, led by a KC, will make the decision on their “independence”.

Note: I applaud the Santana Supporters Group which allows its huge, mostly local, contributors to make social media postings only if they use their real name. How refreshing!

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Travel

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