Outlook a healthy one

COMPANY NZX

Sector: Securities market and information provider Overview: NZX facilitates capital raising and securities trading. Its main function is to provide a platform for the trading, clearing and settlement of securities, and it also operates four agricultural and information businesses. Pros: As a monopoly provider of an essential service, the NZX should be able to maintain strong profit margins. NZX can also look forward to the probable introduction of Fonterra’s Trading Amongst Farmers and the partial sell-down of state-owned enterprises, which are likely to underpin listing and trading revenues. Increasing KiwiSaver funds flowing into New Zealand’s capital markets are also a positive. Cons: NZX will suffer if global economic sentiment deteriorates, as trading volumes will decrease. Further delays in the listing of the state-owned enterprises could also depress the share price. Price performance: NZX is down 18.25 per cent from its all time high of $1.37 in July, recently trading at $1.12. Investment outlook: A monopoly with reasonable gross dividend yield of 6.33 per cent that has growth opportunities with new listings and increasing KiwiSaver investment.

A Broker’s View is written by brokerage and investment adviser Hamilton Hindin Greene. This article represents general information provided by Hamilton Hindin Greene, who may hold an interest in the security. It does not constitute investment advice. Should you wish to receive personalised advice please contact an authorised financial adviser.