Fund managers lukewarm on merger

Fund managers are showing little enthusiasm for the idea of the New Zealand and Australian Stock Exchanges getting together.

The views of fund managers on the idea of a merger (or takeover of the NZSE) are important as they are one of the major user groups and they represent the interests of thousands of New Zealand investors.

Most fund managers spoken to byMoney Managementare luke warm at best on the idea, with none showing outright support for the concept.

A survey done by consulting actuaries Melville Jessup Weaver reveals similar findings.

Of the nine managers asked; six were against, two were in favour but had reservations and one wanted more information.

Guardian Trust Funds Management managing director Anthony Quirk is one who is not totally opposed to the idea. Armstrong Jones chief investment office David McClatchy, and AMP Henderson Global Investors NZ equity manager Stephen Walker aren't committing themselves to either camp at present.

McClatchy says "in principle we should be indifferent to a merger because we can invest in all these capital markets."

Walker's view is that it is a highly important issue which requires further debate.

Firmly in the no-camp are Arcus Investment Management, BT Funds Management, Coronet Asset Management and New Zealand Funds Management.

Arcus head of equities, Simon Botherway, and Coronet's John Phipps both argue the problem with the New Zealand market is poor company management and governance. Merging with the ASX isn't going to help that situation.

BT chief executive Craig Stobo says a merger won't provide him with anything he hasn't already got.

"We are already there in terms of trans-Tasman choice," he says.

While managers are major users of the exchange they have no say in the outcome of the proposed merger at present. The decision will be made by the exchange's members - mainly small sharebroking firms. One way this may change is if the NZSE is demutualised and other interests, such as fund managers, become shareholders.