NZX activity up, value down

NZX trading activity lifted in December but the value dipped on the year before as the operator’s efforts to drive more activity led to smaller transactions.

Total trades rose to 239,051 in December, up 37.1% from the same month a year earlier, NZX’s monthly shareholder metrics show. However, the total value dropped 16.6% to $2.5 billion from December 2017.

NZX has made it a priority to shift more activity on to the formal market to improve price transparency and drive greater liquidity in listed securities. That includes a new pricing structure designed to encourage more activity, updated listing rules, and consolidating the three equity boards into one.

So far the trend has moved in the right direction with onmarket activity accounting for 57.2% of value traded in December, up 11% on the year.

The size of transactions has shrunk with the increased use of algorithmic trading. The average onmarket trade size was down to $8800 in December, 25.5% less than a year earlier.

The equity market still dominates NZX trading, with 236,539 transactions worth $2.4 billion. Of that, 55.8% by value was done on market.

The metrics show 2512 debt transactions worth $87 million in December, down 34%.

For the year, the total number of trades climbed 58% to 3.25 million. By value, trading fell 13% to $38.2 billion, but 53.4% of that was through onmarket activity, a 27% increase from 2017.

New equity listings were nonexistent in December, although $575 million of new debt was added to the NZX as corporates found the listed debt market an attractive alternative to bank funding. Just $20 million of new capital was listed in 2018 through a compliance listing, compared with $4.9 billion of new debt.

In the secondary capital market, $372 million of new debt and equity was raised in December, bringing the annual total to $4.6 billion. Of that, $1.5 billion came from New Zealand issuers, $668 million from dual or foreign issuers, $830 million from domestic funds, $187 million from dual or foreign funds and $1.45 billion of debt.

NZX had 312 listed securities at the end of December, up 5.1% on the year, largely due to a 16.8% rise in debt securities to 132. Equity securities were down 5.5% at 138.

The market’s equity capitalisation was $133.2 billion, or 46.2% of GDP, at the end of December, down 1.4% on the year. The value of debt rose 14.3% to $30.15 billion, or 10.5% of GDP.

The S&P/NZX 50 index ended December at 8811, up 4.9% from a year earlier.

Activity in the derivatives futures market was 15.2% higher in December with 28,226 total lots traded. Options rose 36.1% to 2450 and total open interest increased 35.3% to 70,576.

Professional wholesale data terminals rose 0.1% to 6066 from a year earlier, while retail terminal numbers increased 4.4% to 1314. — BusinessDesk