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NZX share trading continues to lift in May as low interest rates keep investors keen

Wednesday 6th June 2018

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New Zealand share trading continued to push higher in May despite ongoing global volatility as low interest rates continue to fuel enthusiasm for the stock market.

Total cash market trading on the NZX rose 73 percent to 340,204 trades in May from the same month a year earlier, the stock exchange operator's monthly shareholder metrics show. Total value traded rose 36 percent to $5 billion and daily average trades lifted 73 percent to 14,791. The average on-market trade size was up 13 percent to $11,996. 

Year-to-date the total number of trades is up 79 percent to 1.3 million and the total value traded is up 5.3 percent to $17 billion. 

Global markets continued to be hard hit by ongoing concerns about the potential for a trade war between the US and China as well as concerns around the political backdrop in Italy. Domestically, however, the central bank held rates at a record low 1.75 percent and said it expected to keep the official cash rate at an expansionary level for a considerable period of time, helping continue to generate interest in the market given limited returns for debt securities and bank deposits.

Of total trading, the bulk was in equity transactions that rose 75 percent to 336,929 while the value rose 39 percent to $4.9 billion. Debt trading fell 12 percent to 3,275 and the total value traded fell 24 percent to $140 million.

The S&P/NZX 50 Index ended May at 8,659, up 17 percent on the year while the market capitalisation of NZX's equities rose 46 percent to $129.3 billion, or 45.6 percent of gross domestic product. The debt market's value rose 9.5 percent to $27 billion or 9.5 percent of GDP.

The number of listed securities fell 1.7 percent on the year in May to 298, with stocks on the main board down 7 percent to 120, NZAX listings down 5.9 percent to 16, NXT issuers unchanged at four and NZDX issuers up 9.3 percent to 47. 

Some $382 million of secondary capital was raised in May across nine events, of which around half was equity by primary issuers.

In derivatives trading there was a 0.2 percent fall in futures lots to 20,238 and 0.1 percent fall in options to 5,944. Open interest rose 4 percent to 46,505.

NZX's funds management division continued to expand, with total SuperLife funds under management up 17 percent to $2.1 billion and total Smartshares funds up 29 percent to $2.39 billion. Funds under administration in NZX's wealth technology shrank 9.5 percent to $1.13 billion.

New Zealand agri data subscriptions rose 38 percent to 3,664 while Australian data products increased 0.7 percent to 1,501. Paid ad page equivalents at the Farmers Weekly publication, which NZX has sold, fell 26 percent to $89 million, while year-to-date ad page fell 2 percent to $511 million.


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