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NZX trading quieter in January as more activity goes off-market

Thursday 7th February 2019

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NZX trading activity shrank in January from a year earlier and more was done off-market in a period capturing New Zealand's summer holiday. 

The number of cash trades fell 4.1 percent to 206,174 in January from a year earlier, and compared to 239,051 in December, while the total value traded shrank 12 percent to  $2.41 billion, down from $2.5 billion a month earlier, NZX metrics show. 

NZX has made it a priority to shift more activity onto the formal market as a means of improving price transparency and driving greater liquidity in listed securities. That includes a new pricing structure designed to encourage more activity, updated listing rules, and consolidating the three equity boards into one.

That's included adding a regular measure of the value of trading going through the market to the monthly metrics. In January, just 49.7 percent of trading was on-market, down 1.4 percent from a year earlier, and compared to 57.2 percent in December. 

January is typically a quiet month in New Zealand, with many people away over the Christmas and New Year holidays. 

Share trading continues to dominate activity,  with 203,707 trades in the month, down 4.3 percent from a year earlier, for a value traded of $2.33 billion, down 13 percent. Debt trades rose 18 percent to 2,467 for a 2.4 percent increase in value traded to $80 million. 

The NZX's debt market has attracted a number of new issues over the past year, with listed corporate bonds seen as a cheaper funding option than tapping banking facilities or selling equity. That's seen the number of listed debt securities rise 17 percent to 132, with an 11 percent increase in debt issuers to 50. 

New equity listings have been few and far between, with private companies favouring private equity firms flush with cash over going public at a time when prices for all asset classes have been artificially inflated by long-running quantitative easing programmes in the US, Japan and Europe. 

No new debt, equity or funds securities were listed on the NZX in January, although $108 million of new equity was issued in secondary capital raising events. 

The stock exchange operator's derivatives business got busier in January, with a 13 percent increase to 18,748 in futures lots traded and a more than doubling in options traded to 7,556. Open interest was up 44 percent at 67,175. 

NZX's professional terminal numbers gained 0.9 percent to 6,096 while retail terminals were down 3.3 percent at 1,167 and dairy subscriptions rose 6.2 percent to 958. 

The SuperLife funds management unit's total funds under management rose 6.4 percent to $2.16 billion from a year earlier, while the SmartShares total funds under management grew 20 percent to $2.6 billion. 

NZX shares fell 2 percent, or 2 cents, to $1 in early trading. 


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