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NZX share trading jumps in February during month of heightened volatility

Monday 5th March 2018

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New Zealand share trading climbed 66 percent in February, a month encompassing heightened global volatility as international investors questioned the future track of US interest rates and a domestic earnings season that included major surprises from a2 Milk Co and Fletcher Building. 

Total equity trades on the NZX rose 66 percent to 227,153 in February from the same month a year earlier and were up from 212,909 in January, the stock exchange operator's monthly shareholder metrics show. Total value traded increased 12 percent to $3.2 billion for an equivalent increase in the daily average traded value to $167 million. In the year to date, the number of trades rose 78 percent to 442,155 for a 17 percent gain in value to $5.9 billion. 

The bulk of that was in equity transactions, with share trading up 67 percent to 224,827 for a 13 percent increase in value traded to $3.1 billion, while debt trading fell 21 percent to 2,326 for an 8.3 percent decline in value traded to $112 million. 

Global equity markets started February on the backfoot as Wall Street's fear gauge - the Chicago Options Board Exchange's volatility index - spiked to a two-year high as yields on 10-year bonds crept higher, undermining the appeal of stocks. Those ructions were felt around the world and New Zealand's benchmark S&P/NZX 50 index fell as much as 4.5 percent before calm returned to stock markets and it recovered most of those losses during a domestic earnings season that provided mixed results.

The local reporting period was encapsulated by the contrast between a2's jump in profit and new Fonterra Cooperative Group supply deal, with the extent of Fletcher's losses from its Buildings + Interiors unit. 

The NZX 50 ended February at 8,374, up 17 percent from a year earlier, while the market capitalisation of NZX's equities rose 8.9 percent to $129.2 billion, or 46.4 percent of gross domestic product. The debt market's value increased 0.9 percent to $26.5 billion, or 9.5 percent of GDP. 

The number of listed securities fell 3.3 percent in February to 294 from the same month a year earlier, with stocks on the main board down 5.5 percent to 156, NZAX listings falling 11 percent to 16, NXT issuers unchanged at 4 and NZDX issuers up 4.7 percent at 45. 

Some $151 million of capital was raised in February across nine events, of which $121 million was debt, $27 million of equity by dual and secondary issuers, and $3 million of equity by primary issuers. 

Derivatives trading was mixed in the period, with a 15 percent decrease in futures lots to 17,432 and a 22 percent increase in options traded to 2,850. Open interest shrank 15 percent to 41,531. 

NZX's funds management division continued to expand, with total SuperLife funds under management up 18 percent to $2.02 billion and total Smartshares funds up 26 percent to $2.24 billion. Funds under administration in NZX's wealth technology shrank 11 percent to $1.15 billion. 

New Zealand agri data subscriptions rose 46 percent to 3,634 while Australian data products increased 0.6 percent to 1,513. Paid ad page equivalents at the Farmers Weekly publication, which NZX has sold, shrank 6.3 percent to 105, while year-to-date ad page equivalents were up 3.2 percent to 191. 

NZX shares last traded at $1.07 and have declined 4.5 percent so far this year. 

(BusinessDesk)

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