NZX to change pricing next year in effort to stoke liquidity

The stock market operator has gone back to basics in a strategic reset.

NZX will change the price structure of the local stock market in the second half of next year as part of a new strategy aimed at reinvigorating the domestic capital market.

The Wellington-based company will bring its trading and clearing pricing model into line with global practice, which will give participants greater price transparency when negotiating brokerage and services, and stoke on-market liquidity, it said in a statement. NZX will provide details of the move when reporting its 2017 annual result in February and have the new model in place in the second half of 2018.

"NZX is committed to implementing a pricing and rule structure that better supports the needs of our customers, and is consistent with global best practice in facilitating greater on-market liquidity, and driving greater transparency for investors," head of markets development and clearing Benjamin Phillips said. "These changes will further lift the integrity of the New Zealand market."

The stock market operator has gone back to basics in a strategic reset in an effort to revive interest in the exchange and boost the level of trading done through the bourse rather than in off-market deals.

Part of the strategy refresh is to introduce a broader suite of products, and NZX today said it will consult with market participants to develop new tools to drive greater transparency and liquidity on-market and will use a system upgrade in 2019 to meet those requirements.

NZX started trialling a tailored trade pricing structure in July to attract local and international electronic trading flows. That pilot has increased on-market trading by 13 percent compared to the prior period.

The shares last traded at $1.10 and have gained 4.8 percent this year. The stock is rated an average 'hold' based on three recommendations compiled by Reuters, with a median price target of $1.18.

(BusinessDesk)

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