Market hopes for infrastructure traction as global risks persist
While global uncertainty remains a key variable, New Zealand capital market participants are focused on the tangible signs of progress in the domestic infrastructure space. The outlook for 2026 balances risk and optimism as delivery becomes the next test.
CARTER A bumper issuance year for securitisation, nonbanks thriving, the change in, or at least the review of, capital rules from the RBNZ [Reserve Bank of New Zealand] and the infrastructure projects that are underway.
We’ve been talking about infrastructure a lot over the past 12 months, so I’d really like to see significant progress, as well as some innovative structures for how it is funded. This would be a pretty exciting development for the New Zealand market.
LE QUESNE We hope to be talking about inflation remaining at or around target and economic growth continuing to recover. From a market perspective, we are also working on continuing to monitor the return from high levels of settlement cash to ample levels of settlement cash.
BOYLE We are looking forward to Kauri issuance. The last Kauri transaction was issued by NIB [Nordic Investment Bank] in January 2024. Current market dynamics aren’t helpful – including the crowding out of supranational, sovereign and agency issuers by government bonds and the unhelpful basis swap. Changes in these dynamics will attract Kauri issuers back to New Zealand when funding costs in New Zealand dollars are relatively attractive.
High volume of issuance in New Zealand dollars across the credit spectrum will be viewed as a positive for the local market.
We want to see the market adapt well to this change and we want to see the market managing its own liquidity first with the RBNZ as the backstop. We want to continue to see good financial stability and monetary policy implementation through markets.
The impact of trump immediately comes to mind. It is so hard to know how it is going to go. On the infrastructure side, it would be great to actually see some boots on the ground for some of the public-private partnerships and other things that we have been talking about forever.
OVENS We will be talking about the election year that we are in and the global events that have taken place. Hopefully the tariff situation has settled down but, regardless, it will be interesting to see how this trickles into the New Zealand economy and what the impacts have been. There will no doubt be some big ones.
NG I would like to be talking about all the Kauri issuance and the new governor of the reserve bank, but we will almost certainly be talking about Trump.
ROBERTSON How New Zealand’s first female reserve bank governor is performing would be a great topic for discussion. From LGFA [New Zealand Local Government Funding Agency]’s perspective, the water entities. This is a really big change for the local authority sector, New Zealand, LGFA and local capital markets.
SUTCLIFFE The impact of Trump immediately comes to mind. It is so hard to know how it is going to go. I agree that, on the infrastructure side, it would be great to actually see some boots on the ground for some of the public-private partnerships and other things that we have been talking about forever.
