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AsiaFocus Newsletter - January 2019

January 30, 2019


Partners Robert McLean
Senior Associates Victoria Anderson

Overseas investment

Both the New Zealand Dollar and the New Zealand Stock Exchange have been slowly recovering after taking large hits in October. Despite global unease, New Zealand’s economic outlook remains positive with business confidence relatively stable, albeit more subdued than 12 months ago. The Government’s financial statements for 2018 report rising forecasted surpluses and falling core Crown net debt. Against this background, New Zealand’s economy is forecasted to grow faster than that of its major trading partners.

Since the coalition government came into power just over a year ago, it has enacted several of its election campaign policies, demonstrating a strong focus on environmental protection and regional development. The Prime Minister’s focus on environmental protection and climate change was again highlighted at Davos of the World Economic Forum last week. We expect this to be a key theme this year. It also established a Tax Working Group, chaired by former Finance Minister Sir Michael Cullen, which is due to report back in February this year and is expected to recommend some form of capital gains tax.

Agribusiness is expected to perform well in the coming months, with dairy production off to a good start and favourable weather conditions foreshadowing a bountiful season for produce. To boost potential growth, New Zealand will need to tackle pressing concerns in the forestry and dairy sectors. One of the greatest issues facing the government is subdued business confidence over the last year. However, New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion showed business confidence recovered slightly in the fourth quarter of 2018, signalling a more positive business confidence outlook for 2019.

We expect to see continued strength in mergers and acquisitions in the New Zealand market, with private equity in particular being very active. We are unlikely to see new listings on the New Zealand Stock Exchange in any great number and a review of New Zealand’s capital markets (Capital Markets 2029) has recently been announced to investigate.

Our expectation for the year is that strong deal activity will continue, with a number of attractive assets involved in sale processes coming to market. NZX companies to watch include The a2 Milk Company, Fonterra’s recovery and Fletcher Building.

Please let us know if you or any of your clients are interested in discussing any of the topics covered in this newsletter, or have any other enquiries about undertaking business in New Zealand. You can contact us at or feel free to contact any of the persons identified above.

Read our full newslettere here: Asia Focus Newsletter January 2019.