NZ share trading volume gains 5.3% in August, debt still surging

Monday 5th September 2016

New Zealand share trading on the NZX rose 5.3 percent in August from a year earlier, after a decline in July, while debt market activity continued to surge as low interest rates fuel new bond listings.

The volume of cash market trading rose to 151,034 last month and was up from 122,670 in July, NZX's monthly shareholder metrics show. Of that, equity transactions increased 4.6 percent to 147,596 and debt trades jumped 50 percent to 3,437. The value of share trading sank 35 percent to $3.9 billion from August 2015, a month when ASX-listed Origin Energy sold its $1.8 billion controlling stake in Contact Energy but was still higher than the $3.4 billion of equity transactions in July.

The value of debt transactions jumped 86 percent to $153 million from August 2015 but was down from $190 million a month earlier.

NZX's debt market has a renewed vigor this year as globally low interest rates have made bonds an attractive funding option for companies.The number of issuers on the debt market was up 14 percent to 42 in August from a year earlier, with 101 listed securities almost 28 percent higher than August 2015.

Companies listed $960 million of new debt on the NZX in August, taking the year to date tally to $4.3 billion. That compares to no new equity listings last month, with just $1.26 billion of capital has been listed from initial public offerings and compliance listings so far this year.

Some $178 million of new capital was raised across 17 events in August, of which $48 million was by primary issuers, $34 million from dual and secondary issuers, and $96 million of debt. So far this year $2.35 billion of new capital has been raised.

The value of all equity on the NZX was $125.7 billion, or 50.5 percent of gross domestic product, as at Aug. 31, up 27 percent from August 2015, while the value of the debt market was $23.9 billion, or 9.6 percent of GDP, an 81 percent increase from a year earlier.

NZX's derivatives market reported a 7.3 percent decline in the total lots of futures to 21,733, while options trading slumped 85 percent to 1,850. Open interest was up 5.2 percent to 32,544.

The stock market operator's funds management SuperLife unit increased funds under managed 18 percent to $1.59 billion from a year earlier, of which its KiwiSaver funds rose 32 percent to $580 million. Smartshares units on issue jumped 54 percent to 719 million, with a 72 percent gain in value to $1.65 billion.

In grain trading, the volume traded soared 259 percent to 23,544 in the season to date from a year earlier.

NZX shares last traded at $1.03, and have declined 3.7 percent so far this year.

BusinessDesk.co.nz

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