NZX Annual 2013 Metrics reflect very strong capital markets performance
NZX’s full year 2013 Shareholder Metrics reflect an inflection point for the growth of New Zealand’s capital markets in all areas, including capital raisings, listings and trading activity.
The NZX 50 Index was up 16.5% for the year to 4,737. Initial Public Offering activity was at a nine year high resulting in new capital listed of $7.5 billion. The 10 new listings comprised a broad range of company sizes and industry sectors and included Airwork Group, GeoOp, Meridian Energy, Mighty River Power, SLI Systems, Synlait Milk, Snakk Media, Wynyard Group, Z Energy and the reverse listing of Mad Butcher via Veritas.
Cash market trading activity also grew strongly during the year. Total value traded was up 39.6% to $42.3 billion while trading volume was up 32.0% to 1,191,002. Small trades, less than $50k in value, were up 31.4% reflecting a resurgence of interest in capital markets by retail investors.
Positive performance during the year in NZX’s Dairy Derivatives business was demonstrated by the 52.0% increase in the number of lots traded to 36,748, and open interest at 31 December 2013 up 316.4% to 9,070. Tonnes traded on Clear Grain Exchange were down 24.5% to 616,828 due to a significant amount of grain being sold earlier in the 2012/13 season.
The buoyant capital markets activity drove solid growth in NZX’s Clearing House and Depository business with gross value of cleared trades over the period up 40.0% to $42.4 billion. Stock lending activity also grew strongly, up 28.3% to $2.8 billion.
The year was tougher in New Zealand’s agricultural sector due to severe drought conditions across the country in Q1 2013, the impact of which was felt well into Q2. This resulted in total paid advertising page equivalents declining 5.9% and dairy information subscriptions being down 2.0% during the year.
While the securities information business has seen primary data distributors decline by 7.7%, real time data terminals have increased by 6.0% to 7,291 further demonstrating the renewed interest in New Zealand’s capital markets.
NZX CEO Tim Bennett commented: “2013 was significant in the history of New Zealand’s capital markets in particular because of the resurgence of interest from retail investors. NZX continued to invest in building a strong foundation from which to grow the business and the capital markets in the long term.”
“Looking ahead, there are a number of opportunities that we see in the market which we are working hard across the organisation to capture in 2014.”
NZX Regulation Metrics
NZX Regulation (NZXR) supervises market participants and issuers, and assists the Financial Markets Authority as required under the Securities Markets Act 1988.
NZXR conducted 140 investigations and enquiries into possible breaches of NZX rules in 2013 (125 in relation to issuer compliance and 15 in relation to participant compliance) and reviewed 44 complaints from third parties in relation to issuer and participant compliance
NZXR referred nine matters to the NZ Markets Disciplinary Tribunal in 2013, compared to five referred in 2012.
In addition, two significant pieces of work were completed in 2013 that are relevant to the regulatory function.
In August 2013, following a targeted review of practice in exchanges internationally relating to conflict management, the NZX Board established a Regulatory Governance Committee to assist the Board in fulfilling its governance responsibilities relating to NZX's regulatory function. A copy of the Terms of Reference of the Committee can be found at: http://www.nzxgroup.com/corporate-governance
And in November 2013, NZXR’s Enforcement Policy was published which informs the market of its approach in relation to its enforcement work. The policy can be downloaded from NZX’s website at: https://www.nzx.com/regulators/NZXR
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