Share trading jumps 49% in November as benchmark index posts new highs

Today's metrics showed a decline in NZX's derivatives trading.

New Zealand share trading jumped 49 percent in November from a year earlier, with values up by almost the same amount, as the benchmark NZX 50 Index broke new ground, including a mammoth trading day to finish the month.

Total equity trades rose to 214,110 in November from 144,029 a year earlier and up from 213,884 in October, NZX monthly shareholder metrics show. The value of equity trading climbed 47 percent to $5.4 billion in November from a month earlier, which included turnover of $1.48 billion on Nov. 30 when Fisher & Paykel Healthcare was added to a major MSCI index at the expense of Contact Energy.

At the same time, the benchmark NZX 50 broke new highs at the end of the month, and was up 19 percent at 8,187 as at Nov. 30 from a year earlier. The index has gained 19 percent so far this year, closing at 8,176.21 yesterday at a historical price-to-earnings ratio of 18.2 times.

NZX's total cash market trading posted a 47 percent increase in total trades to 217,153 for a $43 percent gain in value traded to $5.6 billion at a daily average of $254 million. So far this year total trades have climbed 15 percent to 1.88 million while the value traded was unchanged at $41 billion.

Debt market activity tapered off in the month, with total trades falling 27 percent to 3,043 from November 2016 for a 31 percent decline in value traded to $141 million. The NZDX debt market has enjoyed a renaissance over the past year as companies sold bonds to fund their capital needs as a low interest rate environment offered cheap cash. Some $200 million of new debt was listed in November, taking the year-to-date tally to $2.97 billion, while $133 million of debt was raised in secondary raisings taking the running total to $1.16 billion.

Another $141 million of equity was raised from primary issuers in November, lifting the year-to-date total to $1.12 billion, and $1 million was raised from dual and secondary issuers, for a running aggregate of $1.35 billion.

The market capitalisation of all equity rose 13 percent to $131.2 billion, or 48.5 percent of gross domestic product, as at Nov. 30 from a year earlier, while the debt market value rose 8.1 percent to $27.3 billion, or 10.1 percent of GDP. That's despite the number of equity securities falling 5.9 percent to 160 from November 2016, while debt securities rose 8.5 percent to 115.

NZX has struggled to attract new companies to the market this year, with just one initial public offering in Oceania Healthcare, and that pipeline has come under scrutiny from fund managers with the high profile departure of Xero, which is shifting to a sole listing on the ASX.

Today's metrics showed a decline in NZX's derivatives trading, with total futures lots traded falling 8.9 percent to 21,342 and options dropping 28 percent to 2,950. Still, open interest rose 4.7 percent to 49,198.

The stock market operator's funds management businesses continued to expand in November, with Smartshares funds under management growing 26 percent to $2.1 billion and SuperLife funds under management rising 21 percent to $1.97 billion. NZX Wealth Technologies' funds under administration shrank 7.6 percent to $1.18 billion.

The agri division boosted NZ agri data subscriptions 27 percent to 3,102, while Australian subscriptions slipped 3.1 percent to 1,515. Paid advertising page equivalents for the Farmers Weekly publication jumped 51 percent to 190, but were down 42 percent to 1,096 in the year-to-date.

NZX shares last traded at $1.10 and have gained 4.8 percent so far this year.