Business

Plenty of capital for well-priced firms

10:55 am on 18 July 2014

AMP Capital expects a steady flow of company floats through to the end of this year.

Head of equities Guy Elliffe said he thought the New Zealand capital markets were currently operating efficiently.

Mr Elliffe said he expected there would be sufficient capital available for companies that were suitable for listing on the stock exchange, and whose offers were reasonably priced.

"I think what we have seen is investors being a little bit more selective about the opportunities both with respect to the quality of the companies that are coming and in terms of the price."

He said there was still plenty of investment funding available.

"If the companies are sufficiently well advanced in their business planning to be ready for public listing and the pricing is right, I think they'll receive a pretty warm response from investors."

In general, he said, the sellers of businesses were being realistic about prices and intermediaries were doing a good job of setting prices at sustainable levels for investment.

He said AMP Capital had been surprised by the resilience of companies that had been negatively exposed to the high New Zealand dollar.

"I do think the market has got an implicit assumption that the dollar will correct modestly over the next couple of months."

He said companies always have the ability to show that their business in the local currencies is performing well and the business's strength can offset the currency's strength.

"And also companies can adopt strategies that can reduce the sensitivity to the currency, for example the building of offshore manufacturing capacity."

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