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NZX debt security trading dwindles as shares stay on a tear

Friday 5th April 2013

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Trading in listed debt securities offering low yields stayed in the doldrums last month, even as shares continued to keep investors keen, according to the stock exchange's monthly update.

The total volume of debt transactions shrank 35 percent to 2,782 in March from a year earlier, for a 24 percent slide in value to $90 million, the NZX's monthly metrics show. That's just 3.4 percent of all trades on the stock exchange, and 2.1 percent of the total value.

Struggling media group APN Media (NZ) and ailing financial services firm NZF Group are the only two listed bonds yielding above 10 percent, with corporate bond yields typically offering between 4 percent and 7 percent.

In contrast, equity transactions climbed 14 percent to 78,454 in March from a year earlier, with a 48 percent gain in the value traded to $4.2 billion. The benchmark NZX 50 was up 26 percent in March from a year earlier, and was recently near five-year highs at 4,430.17.

No new debt capital has been raised in the year to date, compared to $194 million in new equity raisings, of which $31 million was in March. The value of NZX's debt markets shrank 9.1 percent to $14.3 billion in March from a year earlier, while equity market capitalisation grew 20 percent to $70.4 billion.

The number of listed debt securities fell 10 percent to 95 in March from a year earlier, while equity securities declined 4.7 percent to 163. Other listed securities dropped 30 percent to 7.

NZX shares were unchanged at $1.36 today.

BusinessDesk.co.nz

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