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NZ share trading activity rises in May, even as value falls

Tuesday 6th June 2017

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Activity on New Zealand's stock exchange increased while the value of trading shrank in May, a month that delivered the first initial public offering of the year on the NZX. 

The volume of cash trades on the NZX rose 13 percent to 196,467 in May from the same month a year earlier, while the average daily trades were up 8.4 percent to 8,542, NZX shareholder metrics show. The bulk of those were for trades worth less than $50,000, which typically captures transactions by retail investors, which was up 16 percent to 187,525. 

Still, the value traded dropped 15 percent to $3.7 billion from May 2016 and the daily average value shrank 18 percent to $161 million, and activity was down on both measures in the year-to-date, with the number of trades slipped 2.5 percent to 739,718 in the five months through May for a 12 percent drop in value traded to $16.1 billion. 

Last month, NZX reported a dip in first-quarter revenue as a slimmed down agri division offset small gains in its dominant markets division. Newly-appointed chief executive Mark Peterson has been tasked with expanding the business to put it on a stronger footing against domestic and international rivals.

The metrics cover the first IPO of the year with aged care provider Oceania Healthcare joining the bourse. Some $480 million of equity has been listed through an IPO or compliance listing, whereas $770 million of debt has been listed in the year so far. 

Some $209 million of new capital was raised across 10 events in May, taking the total for the year to $933 million from 57 events. About $50 million of new equity was raised in May compared to $159 million of debt, with new bond issues still a favourite source of funding for companies due to the benign interest rate environment. 

That's helped reinvigorate the NZX debt market, which has seen its market value increase 22 percent to $26.8 billion, or 10.3 percent of gross domestic product, from May last year. The market capitalisation of all equity rose just 1.8 percent to $122.1 billion, or 46.7 percent of GDP. 

The benchmark S&P/NZX 50 index rose 5.4 percent in May, ending the month at 7,419.9, and closed last week at 7,499.97. 

The stock market operator's funds management business – Smartshares and SuperLife – grew funds under management 14 percent to $1.86 billion as at May 31 from a year earlier, with a 19 percent increase in KiwiSaver funds to $653 million. 

NZX shares last traded at $1.09, having increased 3.9 percent so far this year. 





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