NZX trading activity increases in July, touts improving on-market transactions

Total trades jumped 70 percent to 258,063 in July. Photo: Getty Images

NZX trading activity was busier in July from a year earlier, although with smaller values changing hands, and the stock market operator touts more than half its transactions took place on-market.

Total trades jumped 70 percent to 258,063 in July, with average daily trades at 11,730, NZX's monthly metrics show. Still, the increased volumes didn't translate to a higher value of trading with the total value traded down 24 percent to $2.62 billion, or a daily average of $119 million. The stock market operator has been seeking to encourage more activity on its bourse to stoke greater liquidity and today said 52.6 percent of the value of trading was on-market, compared to 33.4 percent a year earlier. In the year to date, the volume of trading has climbed 75 percent to 1.88 million transactions, while the value of trading dipped 1.6 percent to $22.94 billion.

The S&P/NZX 50 index hit a record high in July, closing above 9,000 for the first time, as heightened trade tensions between the US and China see investors' appetite for riskier assets wax and wane. The benchmark index rose 16 percent in July from a year earlier, ending the month at 8,922. Since then it has tapered off and in early trading today, the NZX 50 was up 0.1 percent to 8,877.74.

Equity trading continued to dominate transactions in July, with the volume rising 72 percent to 254,936, while the value traded dropped 25 percent to $2.47 billion. About 50.3 percent of the value of equity transactions took place on-market. The number of debt transactions dropped 11 percent to 3,127 in July from a year earlier, while the value traded fell 5.2 percent to $153 million. Some 90.6 percent of the value of debt transactions took place on market.

NZX still struggled to attract new participants to the bourse in July, with no initial public offerings or compliance equity listings, and $240 million of new debt listed. That may be about to change with Australia & New Zealand Banking Group considering an IPO for its UDC Finance division and The Australian newspaper today reporting Straker Translations may seek a dual-listing on the ASX and NZX in the near term.

Firms already listed continued to raise funds in secondary capital raisings, with $351 million of new debt and equity raised in the month across 111 events. That takes the year-to-date tally to $3.1 billion across 767 events.

Derivatives trading soared, with total futures lots traded up 29 percent to 26,751 while options lots traded jumped 329 percent to 14,900. Funds under management for its SuperLife division expanded 18 percent to $2.14 billion, while Smartshares funds grew 34 percent to $2.55 billion.

NZX's dairy data subscriptions rose 26 percent to 969 in the month from a year earlier, while its professional wholesale terminal numbers fell 1.2 percent to 6,038 and its retail terminal numbers rose 2 percent to 1,250.

The shares were unchanged at $1.09 and have declined 2.7 percent so far this year.