“Metlifecare may at some stage come back to the market – ever since they went private, they've continued to engage with the market,” said Michael Sherrock, head of equities at Nikko Asset Management, said in answer to a question at a Nikko event in Wellington.

While Metlifecare was taken over in 2020 by Sweden-based EQT for $1.3 billion, it still has $100 million on bonds maturing in September 2026 listed on NZX.

“Maybe they will wait for the housing market to pick up,” Sherrock said.

It will be interesting to see it get away – or how they will get it away.”

Sherrock also noted that the new climate-related reporting obligations have proved to be very costly, particularly for smaller listed companies.

Amendments to the Financial Markets Conduct Act (FMCA) mandates that most of the companies listed on NZX, as well as a number of other businesses, are required to produce annual climate-related disclosures.

The legislation stipulates any company with a market capitalisation of $60 million or more is regarded as “large” for the purposes of the Act, even though few involved in the share market would agree such companies are large..

Sherrock said he has surveyed companies and found that on average they've been spending about $500,000 on external advice alone with the costs of senior management and directors' time, particularly given their personal liability, on top of that.

“Some smaller companies are nearing $1 million of costs,” he said. “When you think about that coming straight off the bottom line, it's quite an impost for companies.”

The penalties for failing to comply with part 7A of the FMCA are severe: directors face prison for up to five years, or a fine of up to $500,000, or both, and companies face fines of up to $2.5 million.

“It's quite an impediment if you're looking at listing. Some big companies can handle it quite well but for smaller companies it's a lot of work and a lot of costs” and it has meant companies' sustainability teams are spending a lot of time on reporting “rather than actually removing carbon emissions from their businesses,” Sherrock said.