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Shares already traded in unlisted NZSE


Wednesday 22nd January 2003

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Shares in the New Zealand Stock Exchange (NZSE) are changing hands in private, off-market transactions ahead of the new company's listing on the sharemarket.

The NZSE issued parcels of 10,000 unpriced shares to members when it changed on December 31 from a mutual to a limited liability company.

The NZSE was likely to list on its own main board between March and June, but first had to expand its coffers and widen its shareholder base from 332 to 500.

ASB Securities managing director Tim Preston said there had already been some interest in the shares, and at least five brokers appeared to be involved in trading them.

"It's very much at the moment back of the envelope stuff.

"There were a number of investors who are looking to buy the shares and we just responded to those requests ... We sent a notice around saying we were interested in some shares at a set price, and that seemed to spark a bit of activity in the market," Mr Preston said.

"We quoted at $5.00, and since had a buyer prepared to pay $5.35, but that was topped by another broker (JB Were yesterday) at $6.00.

"There's obviously interest out there from people outside those who were issued shares."

The shares are traded through certificates, not electronically.

"We don't have a lot of information at the moment, and those people who are buying are making their own assessment about what the exchange could, or should, be worth."

The $6 price on the 3.32 million shares issued to brokers values the exchange at $19.9 million.

Mr Preston said the turnover had been small -- ASB had seen about 20,000 shares change hands.

"I don't think you'll see a lot of activity but you are seeing one or two people, and no one in this firm would be a seller of the shares."

However, the shares were changing hands with no information available about their appropriate valuation, or what the exchange's corporate structure would be.

The NZSE, which has seen a fall in trading volumes and is unhappy with the low number of listings, posted a $515,000 loss for the last financial year.

The exchange was initially concentrating on its transformation into a company, before turning its attention to listing.

"In fairness to the exchange, given they are not happy with a lot of things that happen on the secondary board, and are very much aiming to have a lot more credibility in the financial markets and accountability, it would have been stupid of them to list on the secondary board, it would have been a bit hypocritical."

In August the NZSE unveiled plans for a new secondary market, the AX, to replace both the unlisted, or secondary market, and the New Capital Market.

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