NZX cash market activity rises in March as debt market turnover doubles

Cash market trades on the NZX climbed by almost a third in March from a year earlier as share trading remained robust on investor demand for yield while turnover in the bond market more than doubled.

Total cash rates rose 32% to 167,010 last month, and were up from 149,073 in February, for an 18% gain in total value traded to $4.4 billion. The daily average value traded was up 23% at $212 million from a year earlier, and ahead of the $169 million average in February. Equities still dominated, with the number of trades climbed 31% to 163,341 and a 16% lift in value traded to $4.3 billion.

Still, debt market trades were up 53% to 3669 and the value traded jumped 118% to $180 million as the addition of the New Zealand Local Government Funding Agency's six bonds representing a total $5.56 billion reinvigorated the board. More recently, companies have returned to the bond market to raise money as interest rates hover near record lows, and $1.28 billion of new debt was listed in March, taking the year to date total to $1.4 billion.

That outpaced the $30 million of new equity listed in March, though poultry company Tegel Group Holdings is set to join the stock market next month in the first initial public offering of the year, with plans to raise between $299.1 million and $344.4 million.

About $81 million of new capital was raised across 16 events in March, of which $70 million was primary capital and $11 million from secondary and dual issuers.

The number of equity securities was up 0.6% from a year earlier at 172 in March, while debt securities were 12% higher at 91. The value of all equity was $115.5 billion, or 46.9% of gross domestic product, up 16% from March 2015, while the debt market was valued at $20.8 billion, or 8.4% of GDP, a gain of 71%.

The S&P/NZX 50 index climbed 8.4% to 6752 in March and was 16% higher than a year earlier.

NZX's SuperLife business expanded funds under management by 16% to $1.48 billion in March from a year earlier, driving a 2005% gain in Smartshares' funds under management to $1.56 billion. Its newly acquired Apteryx division had $1.33 billion of funds under administration, an increase of 7.8% from a year earlier.

In soft commodities, lots traded of derivatives were down 23% to 11,094 in March from a year earlier, even as open interest climbed 24% to 24,964. The tonnage of grain traded was down 3.6% to 385,245 tonnes in the season to date.

NZX shares last traded at $1.03 and have decreased 3.7% this year.

(BusinessDesk)