4 NZX stocks that should consider joining the ASX

Nick Sundich Nick Sundich, January 3, 2024

NZX stocks typically are not on the radar of ASX investors (or any investors outside the Land of the Long White Cloud for that matter), unless they take up a place on the ASX. Some choose to remain dual-listed, others chose to make the ASX their primary home eventually like Xero (ASX:XRO) did.

The reasons for companies making the shift include the small size of the New Zealand Exchange, the smaller investor base and lower liquidity. Some NZX companies have not seen the light and probably should sooner rather than later. We’ve run a ruler through the list of NZX stocks, and thought of a few that would be better off listed on the ASX rather than the NZX. It would give their shares more liquidity, win over more investors and perhaps even customers too. Without any further ado, here are the NZX stocks we have thought the time is ripe for them to shift.

 

4 NZX stocks that should be on the ASX
Mainfreight

You’ve probably heard of this New Zealand logistics and transport company. Mainfreight has been listed on the NZX since 1996 and has over 9,000 employees across the globe. It has a presence in Australia too with 22 depots of its own and its reliant on agents and third parties in certain parts of the country.

Mainfreight has a reasonable trading volume, although nowhere near what you’d expect of a NZ$7bn company. We think the success of WiseTech (ASX:WTC) shows that investors in Australia understand the logistics sector. Even though Mainfreight is a bread and butter logistics company and not a software company, it is a market leader and its technology has been one of the key reasons. We also think ASX investors would like companies with long-term visions – Mainfreight still has a 100-year plan that set up by its founding partners in 1979.

 

Ryman Healthcare

Ryman is an operator of aged care and retirement village facilities and is the largest company of its kind on the NZX. It isn’t as well known in Australia, even though it has somewhat of a presence, in the form of roughly half a dozen properties in Australia.

We think there is an appetite for more aged care stocks since Estia was taken over by private equity last year. Ryman is a company solid financials, recording a $186.7m profit in 1HY24 and having total assets of over $13bn.

 

Skellerup

Skellerup began as a gumboot maker in 1910 but is these days a far broader business. It can be best described as rubber & dairy equipment manufacturer.

Skellerup sells its products globally including in Australia and is capitalised at just under NZ$1bn. It has been listed on the NZX for several years and it probably one of the most familiar stocks to New Zealand investors. Nonetheless, we think a public listing on the ASX would raise its profile, not just among investors but potential customers in Australia too.

 

Smartshares

Smartshares is the NZX’s largest ETF provider. It is a pioneer in the NZ market, having launched its first in 1996, the NZ Top 10 Fund. It now has over 40 funds including some focused on the ASX, some on the US markets, some on bonds and cash and even thematic equities like Automation and Robotics.

Smartshares may be content with being the largest NZX provider, although we do think it should consider listing some of its funds on the ASX. Australian investors are a lot more embracing and understanding of ETFs, particularly the new cohort of investors that only began trading during the pandemic.

 

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