“Credit markets are a bit concerned about the financial structure of these businesses and the longevity of their earnings,” Salt Funds managing director Matt Goodson said.
“In a global sense, the failure of that [Firmus] IPO to get up was noticed although it had some specific aspects that made it fairly unappealing.
“There was a significant up-valuation from the last capital raise just three months ago and, on top of that, that equity raise gave the owners some quite major anti-dilution rights as well.”
In terms of issues, the AI market faced two “biggies”.
“One is rising bond yields, which have hit all the stocks in this space – even the highest quality players like Infratil, Goodman Group and NextDC because their long duration leases are worth a bit less, in today’s money.
“That goes for data centre and property stocks globally – it’s just a function of the cost of money.
“The second thing is that there has been some evidence emerging that annualised revenue growth has started to slow quite sharply for OpenAI and Anthropic in recent weeks, and that obviously leads to questions.
“These hyperscalers have massive, massive investment commitments.
“Will they be able to fund those commitments?”
A critical juncture for the market would be Anthropic’s IPO, which is expected next month.
“OpenAI appears to have been pushed back into next year, which is problematic in itself, but if we see the Anthropic IPO get pushed back I think that will be a really negative sign for the sector,” Goodson said.
“Conversely, if they manage to get their IPO up on reasonable terms, there’s a chance that bulls in the sector will come roaring back again.”
Anthropic told investors this week that third-quarter revenue had jumped 50% to US$16.8 billion ($29.9b) and that the company was profitable.
Meanwhile, the Financial Times reported Wall Street IPOs had slowed to a trickle as tepid investor demand for new deals and worries about high valuations weigh on what was tipped to be a bumper quarter of new listings.
Bond sell-off
The worldwide sell-off in bonds is increasing borrowing costs but offers investors opportunity, Fisher Funds senior portfolio manager Quin Casey said.
Since the end of February 2026, just before the US–Iran conflict, New Zealand’s 10-year Government bond yield has risen by around 0.7 percentage points to about 5%, Casey said in a commentary.
When bond yields rise, bond prices fall, creating a headwind for fixed income returns.
A common yardstick for the New Zealand fixed income market is the Bloomberg NZBond Composite Index, which includes New Zealand government and corporate bonds across a range of maturities.
The index has returned just above zero so far in 2026, with income largely offset by capital losses as its yield has risen from around 3.7% at the start of the year to about 4.5% today.
“That higher yield offers a silver lining: investors now have a greater income cushion to absorb further increases in interest rates,” Casey said.
For example, with the index’s duration – a measure of its sensitivity to interest rates – at around 4.65 years, a further one percentage point rise in yields would imply a capital loss of about 4.65%, he said.
“In simple terms, that would largely offset a year’s income of around 4.5%, leaving a total return slightly negative.
“Could New Zealand yields rise by another percentage point over the coming year? It’s possible.
“Global bond markets face upward pressure from inflation uncertainty, government borrowing requirements and geopolitical risks, and New Zealand is unlikely to be immune.
“But there is another side to the story. Higher borrowing costs put pressure on households, businesses and economic activity.”
If weaker activity eventually eases domestic inflationary pressure, it could create the conditions for lower yields in New Zealand over the medium term.
“In other words, higher yields today help lay the groundwork for lower yields tomorrow,” Casey said.
“The adjustment to higher yields can be uncomfortable, but the higher income now available to bond investors is improving the outlook for future fixed income returns.”
Fitch on borrowing
Fitch Ratings said the recent sharp and widespread increase in government bond yields represented a significant increase in real global borrowing costs.
Bond yields have risen to multidecade highs in the US, Germany, Britain and Japan in recent weeks, as highlighted in Fitch Ratings’ latest Economic Monitor chart pack.
Ten-year government bond yields have risen in major global markets since the previous Fitch-20 Economic Monitor in June.
US yields averaged 4.99% in September, up from 4.47% in June; 3.5% from 3% in Germany; 5.46% from 5.06% in Britain; and 2.99% from 2.65% in Japan.
Korea also recorded a marked increase, with yields averaging 4.45% from 4.18% in June.
Jarden appointments
Nick McLister and Jared Butters have been appointed to the Jarden team in New Zealand.
McLister joined as a director and sales trader. He brings about 30 years’ experience in the Australia and New Zealand markets, most recently from Forsyth Barr, where he spent 10 years after working in Australia at Merrill Lynch and Goldman Sachs.
Butters joined as a director and sales trader. He has about 20 years’ experience, most recently at Forsyth Barr, where he had been sales trading for more than 15 years.
He previously held roles in retail dealing and institutional fixed interest dealing.
Butters is registered as a financial adviser and accredited as an NZX adviser.
Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.
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