NZX cash market trading value falls in first quarter as rise in smaller transactions lifts volume

NZX Stock Ticket in Auckland (Tony Siu)

The value of cash market trading on the NZX dropped 20 percent in the first quarter while a rise in smaller transaction drove a jump in overall volumes on the New Zealand bourse.

Total trades rose 35 percent to 313,903 in the three months ending March 31 from a year earlier, NZX said in a statement. Trades of less than $50,000 jumped about 39 percent to 292,895. The value traded dropped 20 percent to $8.1 billion while daily average value traded fell 21 percent to $133 million.

Of that cash market trading equity transactions dominated, with value traded declining 20 percent to $7.9 billion and the number of trades rising 37 percent to 307,458. Debt transactions fell 9 percent to $209 million and volume declined 12 percent to 6,445 trades.

The first quarter saw no new listings, after a boom 2013 that was led by the government taking electricity companies MightyRiverPower and Meridian Energy public. NZX has warned it won't be able to replicate last year's pace of listings in 2014, although it welcomed Genesis Energy last month and that stock has since climbed 23 percent.

Trading volumes have been climbing as the growth of retirement savings through KiwiSaver generated funds for investment, with a portion finding its way to the New Zealand equities market.

"The programme has been critical for the development of New Zealand's capital markets, with the newly listed companies now comprising 7.3 percent of total market capitalization, which combined with the impact of KiwiSaver and an increased savings rate, is underpinning a structural shift in the capital markets," said Tim Bennett, NZX chief executive.

He said NZX was talking to other companies considering listing, from a range of industries including tourism, agriculture, energy and transport.

In the first quarter, listed equity securities rose 0.6 percent to 164. Listed debt securities declined 11 percent to 85, while overall listed securities fell 3.8 percent to 255.

Capital raised in the quarter climbed 147 percent to $480 million, as the number of capital raising events rose 2.3 percent to 45 in the latest three months. New capital listed rose 328 percent to $260 million.

The market value of all equity rose 24 percent to $87.4 billion, or 39 percent of gross domestic product in the quarter, while the debt market was valued at $13.5 billion or 6 percent of GDP, down 5.8 percent on the previous year.

Derivatives trading grew in the first three months of the year, with lots traded up 156 percent to 12,395 while open interest, a measure of activity and liquidity, fell 22 percent to 3,573 from the first quarter in 2013.

Shares in the stock market operator were unchanged at $1.25 before trade opened this morning and have declined 6.7 percent in the past year.

(BusinessDesk)

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