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NZX cash market activity rises in March as debt market turnover doubles

Tuesday 5th April 2016

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Cash market trades on the NZX climbed by almost a third in March from a year earlier as share trading remained robust on investor demand for yield while turnover in the bond market more than doubled. 

Total cash rates rose 32 percent to 167,010 last month, and were up from 149,073 in February, for an 18 percent gain in total value traded to $4.4 billion. The daily average value traded was up 23 percent at $212 million from a year earlier, and ahead of the $169 million average in February. Equities still dominated, with the number of trades climbed 31 percent to 163,341 and a 16 percent lift in value traded to $4.3 billion. 

Still, debt market trades were up 53 percent to 3,669 and the value traded jumped 118 percent to $180 million as the addition of the New Zealand Local Government Funding Agency's six bonds representing a total $5.56 billion reinvigorated the board. More recently, companies have returned to the bond market to raise money as interest rates hover near record lows, and $1.28 billion of new debt was listed in March, taking the year to date total to $1.4 billion. 

That outpaced the $30 million of new equity listed in March, though poultry company Tegel Group Holdings is set to join the stock market next month in the first initial public offering of the year, with plans to raise between $299.1 million and $344.4 million. 

About $81 million of new capital was raised across 16 events in March, of which $70 million was primary capital and $11 million from secondary and dual issuers. 

The number of equity securities was up 0.6 percent from a year earlier at 172 in March, while debt securities were 12 percent higher at 91. The value of all equity was $115.5 billion, or 46.9 percent of gross domestic product, up 16 percent from March 2015, while the debt market was valued at $20.8 billion, or 8.4 percent of GDP, a gain of 71 percent. 

The S&P/NZX 50 index climbed 8.4 percent to 6,752 in March, and was 16 percent higher than a year earlier. 

NZX's SuperLife business expanded funds under management by 16 percent to $1.48 billion in March from a year earlier, driving a 2005 percent gain in Smartshares' funds under management to $1.56 billion. Its newly acquired Apteryx division had $1.33 billion of funds under administration, an increase of 7.8 percent from a year earlier. 

In soft commodities, lots traded of derivatives were down 23 percent to 11,094 in March from a year earlier, even as open interest climbed 24 percent to 24,964. The tonnage of grain traded was down 3.6 percent to 385,245 tonnes in the season to date. 

NZX shares last traded at $1.03 and have decreased 3.7 percent this year. 


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