NZX boss Mark Weldon has welcomed news of a potential partial float of online auction website Trade Me, saying it should prove a catalyst for breathing life into the sharemarket.

Fairfax Media has given no timing for its proposed sell-down of 30 to 35 per cent of Trade Me other than saying it would be when market conditions were right. The proceeds from the sale will be used to reduce debt and increase dividends.

Trade Me would be a public, stand-alone company listed on the NZX and chaired by former Fairfax CEO David Kirk. He says the move will free-up Trade Me to access the expansion capital the business needs and that it was now big enough to warrant a separate listing.

Weldon says the market conditions are still volatile although he claims the New Zealand sharemarket has fared a lot better than most following the recent global market meltdown - it's only down around 2 per cent compared to 6.5 per cent for the Australian ASX and around 12 per cent for the Nasdaq.

There was a general optimism in the market and the corporate results released over the past two weeks of reporting season were generally ''pretty decent'', he said, so the prognosis for the New Zealand economy was relatively strong.

He said Fairfax was right to wait however until it was confident that stability had returned to the market.

''People want to know on the day they list the market is not going to be up or down 3 per cent. They want to list in a stable period and I would expect that to be towards the end of this year. This is an issue that has been created by politics rather than a sick private sector.''

In terms of other potential listings, there had been talk of IPOs from both retirement village operators Summerset and Vision Senior Living.

Weldon hopes the partial Trade Me sale will be a catalyst for sparking others to come back to the market and he's now picking Summerset will also float towards the end of the year and Vision Senior Living early next year.

'TIMING RIGHT'

Kirk says the timing is right for the media company to sell part of its Kiwi auction website Trade Me.

''It will free Trade Me to access external capital as the business is now large enough to warrant a separate listing and for Fairfax itself, it will retain access to the majority of the business and therefore earnings that come from that.''

Kirk has been appointed non-executive chairman of the Trade Me board and company founder Sam Morgan, who's also currently on the Fairfax Media board, will be a director of the spin off.

Kirk says he thinks it will be helpful to have Morgan on the board.

''Sam knows the business very well and has a broad understanding of Internet and other technology businesses. That's all going to be very important going forward.''

No value was placed on the potential float by Fairfax Media but analysts earlier this year had views on that.

Analast Fraser McLeish of Royal Bank of Scotland, who sparked speculation in April about a potential part-sale by issuing a report suggesting Fairfax float half of Trade Me through an IPO, said at the time that the move would boost the trans-Tasman group's share price.

His advice was based on a calculation in which a 50 per cent stake in Trade Me would raise up to A$600 million, with the proceeds helping Fairfax fund a 10 per cent share buyback, reduce net debt by A$290m, and A$1.2 billion and pay a higher dividend.

Kirk, who was responsible for the purchase at the time, now says he had no forethought then of publicly floating any of it at some future date.

''I bought it because I felt it was a fantastic businses which would continue to grow and do well and would work within the Fairfax portfolio. Given it was clear that classified advertising would suffer long-term and was in decline it was also clear that Trade Me might look to pick up some of that business. It was not only an opportunity to grow Fairfax but also an opportunity to defend the loss of those classifieds.''

RESULTS

In Fairfax's full year results to June 2011 released today, it shows Trade Me revenue was up 11.5 per cent.



Earnings before interest, taxes, depreciation, and amortisation increased by 9.4 per cent to $99.2m.

Fairfax Media, meanwhile, posted a full-year loss of net A$401 million ($505m).

Fairfax's general manager for investor relations Frank Sufferini said because of the strict securities law there wasn't much he could add to the company's statement before a prospectus was issued.

"It's [the statement] as far as we can go."

Fairfax would now "get the business ready" for the initial public offering, Sufferini said.

Once that had occurred, and "it was the right time", Fairfax would issue a prospectus. At that stage the company would be able to say more, Sufferini said.

Analysts have valued Trade Me at $1.3 billion to $2 billion. It has 2.7 million registered traders and employs 190 staff in New Zealand.

Since Fairfax Media bought Trade Me for $700 million in 2006, under the leadership of Kirk, it has been the trans-Tasman company's star performer.

While the company does not split out Trade Me specifically, the auction site makes up the majority of the 17 per cent of earnings contributed by the "online" sector to the Fairfax pie.

Fairfax's market value is around A$2.3 billion ($3b).

ORIGINAL INVESTOR

Original Trade Me investor Phil McCaw says Fairfax's announcement of an initial public offering of up to 35 per cent of the auction site is "fantastic for New Zealand".

McCaw, who is now heavily involved in angel investing and is a founding partner of investment manager Movac, has an estimated fortune of $95 million thanks in large part to his former stake in Trade Me.

He said today that any float of Trade Me would be a "great opportunity for New Zealand to invest in a great company".

When asked if he would re-invest in the site he said "it's tempting, isn't it".

McCaw wouldn't speculate on any potential share price and said he would "leave further comment to someone else".

Fellow Trade Me original investors Richard Abbott, Mark Richter, Sharon Weaver and Ian Miller are also investors in Movac.

Key Trade Me statistics:



* 2.8 million registered members



* 1 million members logged in over the past month



* In 2010, more than 1 million people bought or sold something on Trade Me



* 1.7+ million concurrent listings. Around half of listings are brand new



* 8.5+ million unique browsers per month



* 2.5 million emails sent per day



* 700,000 + visitors each day (according to Nielsen Online)



* 25,000 message board posts daily



The websites:



Trade Me - core marketplace for online auctions and classifieds



Trade Me Motors - vehicle auctions and classifieds



Trade Me Property - real estate classifieds, for sale and for rent



Trade Me Jobs - employment classifieds



FindSomeone - Online dating



Travelbug - hotel and motel booking



BookIt - Travel and tourism booking engine



Holiday Houses - holiday home rentals



Old Friends - school and workplace networking

- This story was updated on 29/08/2011. Information was removed with reference to Summerset 's float.