Your Quarterly E-Zine
Edition 11 • December 2019

This website contains the latest edition of Forsyth Barr Focus, a quarterly on-line magazine written by senior members of Forsyth Barr's investment team.

If you experience any difficulty in accessing Forsyth Barr Focus,
please call 0800 367 227, or e-Mail editor@forsythbarrfocus.co.nz for assistance.

 

SIR EION EDGAR

In his distinguished career, Sir Eion Edgar has served as Chancellor of the University of Otago, Chairman of the New Zealand Stock Exchange and more. Sir Eion retired as Chairman of Forsyth Barr earlier this year, so we took the opportunity to ask him about his life, career, and what lies ahead for him now.

Your father George, who was originally from Tapanui, qualified as an accountant and became a sharebroker and member of the Dunedin Stock Exchange in the 1960’s. Growing up in Otago in the 1950’s, was it always your plan to follow in your father’s footsteps?

Yes, I followed the sharemarket from an early age - regular company reports arrived in our post box most days. I bought my first shares when I was 12 and followed the market during secondary school. During that time and at University I occasionally worked at Forsyth Barr in the holidays.

You first became seriously involved in the New Zealand sharemarket at the age of 27 when you purchased the seat of the late Barry Clarke on the Dunedin Stock Exchange in 1972.  What characterised the New Zealand sharemarket of the 1970’s?

The sharemarket in the 1970’s had its ups and downs. When the market was quiet we concentrated advising our clients on fixed interest securities and consequently built up a substantial base and a good understanding of this part of the market.

The mid-1980’s saw a local sharemarket boom. By late 1986, two new companies were being listed per week, and you became Chairman of the Dunedin Regional Stock Exchange. How do you recall the excitement of 1986 and the dramatic events of the following year?

The market was so active that Forsyth Barr took the decision in mid-1986 to not take on any new clients as we were struggling to properly service our existing client base. In hindsight this was a wonderful move as it meant our records were up to date when the correction happened in October 1987. That dramatic day was my first meeting as a member of the New Zealand Stock Exchange Board, and the board realised by the end of the day that at least five of our members were underwater.

In 1989, a decision was taken to abolish the Regional Stock Exchange. As a Board Member of the New Zealand Stock Exchange did the establishment of a national stock exchange change the nature of the local sharemarket and the behaviour of investors in any way?

The main change happened with the introduction of screen trading meaning there was no reason to have regional exchanges. The introduction of screen trading and an updated settlement system allowed for much greater activity on the NZ exchange.

Your full-time career with Forsyth Barr started in November 1972 and you became a partner in April 1973. At that time there were four partners and six staff. With over 320 staff in 22 offices today, what do you consider be the main reasons for the company’s significant growth over the past 46 years?

The principal reason for the significant growth was the determination by Michael Devereux and myself and later Michael Sidey to diversify the income streams of the business. Thus we created “Thinking about Tomorrow” a prelude to the present KiwiSaver scheme, Private Portfolio Management and latterly Premium Advisory Service. In the early days we also established a contributory mortgage scheme and as I said earlier we built up our records in fixed interest securities. In addition whenever there was a downturn in market activity we took the opportunity to expand and consequently were able to attract some excellent staff so we could open branches around the country. I might add that we are still looking for good people.

You’ve experienced the emotions of a number of sharemarket booms and busts over the past five decades. Looking back over this time, what do you consider to be the most important factors which lead to successful investment outcomes?

Not panicking and as stated previously being prepared to grow during these down turns.

Throughout your life you’ve had an intense involvement in sport, including being appointed as President of the New Zealand Olympic Committee. Where did your interest in sport first originate from and which sports do you particularly follow today?

I was a keen participator in sport at school. Particularly in basketball and cricket. Consequently my academic results were very average. After school I continued with cricket and basketball and started to play tennis on a regular basis which I still do today. I follow all sports particularly rugby, netball - my wife was a regional representative - and winter sports.

Your work in the community, philanthropy and support of sport and the arts has been recognised through many awards, over many years. What motivates you to lend your charitable support to so many different causes?

The old Scottish philosophy that you should give back to communities you have benefitted from.

As a former Director of the Reserve Bank of New Zealand, you’ve worked with both Government and the private sector, and understand the important relationship between each. What do New Zealand businesses need from Government to be successful in the future?

The main thing businesses need is a clear understanding of the Government’s position.

Now that you’ve retired as Chairman of Forsyth Barr’s Board of Directors, you’ve said you’ll stay closely interested in the future progress of the business. Do you have any new projects or causes that you’ll also be lending your energy to in the future?

I am still on the Investment Banking Committee and in my role as Ambassador I will continue to actively promote Forsyth Barr. In addition I will continue to promote the philanthropic causes I am involved with, in particular the University of Otago, Queenstown Trails Trust, Diabetes NZ and the newly formed NZ Dementia Prevention Trust.

Eion Edgar

Sir Eion Edgar

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