Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZX reviews benchmark weightings ahead of SOE floats

NZX reviews weightings rules for benchmark indexes as SOE floats loom

by Jonathan Underhill

Dec. 21 (BusinessDesk) – Stock exchange operator NZX is seeking feedback on possible changes to its rules for the weightings companies are given in its benchmark stock indexes to ensure the sell-down and listing of state-owned enterprises doesn’t result in a “less investable” market.

New Zealand’s stock exchange manager uses what it calls ‘modified free float rules’ for the benchmark NZX 50 Index. That means it subtracts so-called strategic holdings from the total number of shares on issue to determine a company’s number of indexed shares. It then makes a further adjustment based on the company’s six-month average free-float market capitalisation.

The methodology was introduced in 2003, with the further adjustment aimed at ensuring no single company dominated the index. While the full details of the adjustments are more complex, it boils down to approximately $3.5 billion, or 9 percent, of the NZX 50’s market value of $38 billion being due to the modifications.

Were the NZX to switch to a ‘pure free float’ model, the market value of the NZX 50 would shrink to about $34.9 billion.

The two new options proposed by the NZX are a pure free float or adjustments to the middle and upper thresholds.

NZX assumes the sale and listing of 49 percent each of Genesis Energy, Mighty River Power. Meridian Energy and Solid Energy, together with the partial sell-down of already-listed Air New Zealand, would add $4.8 billion to the NZX 50’s free float market capitalisation. That’s made up of $750 million for Genesis, $1.25 billion for Mighty River Power, $1.75 billion for Meridian, $750 million for Solid Energy and a $300 million increase for Air New Zealand.

Under the existing methodology, the NZX 50’s market value would rise to $46.6 billion. But on a pure free-float methodology, the increase would be back up to $39 billion from $34.9 billion.

NZX is reviewing its NZX 10 Index of the biggest companies on the same basis and also mulling the launch of a new NZX 20 Index, which would be used as the basis for the launch of a new futures contract in the first half of 2012.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Igniting The Spark: Bringing The Digital Enabler To Life

Changing a name is, relatively speaking, the easy part of a re-invention. Changing a culture, getting all the ducks in a row, turning yourself inside-out to become customer-inspired is a much bigger challenge. More>>

ALSO:

Ebola And NZ: Targeted Screening At Airport But Risk Low

The risk of any cases of Ebola in New Zealand remains very low, but health and border authorities are well prepared... anyone arriving in New Zealand who in the last three weeks has visited countries affected will be screened for symptoms of the disease. More>>

ALSO:

Scoop Business: Brewer Seeking Crowd-Funding Cancels Shareholders’ Dividends

Shareholders in Renaissance Brewing company, the first business to seek equity through crowd-funding in New Zealand, have cancelled their claim on $147,000 of accumulated earnings “to make Renaissance a more attractive investment opportunity.” More>>

ALSO:

It's Spark Now:
Why Telecom Wanted To Change

New Zealand led the world when Chorus demerged from Telecom. It gave us a telecommunications industry structure where the network is completely separated from the products and services it delivers. The changes brought about a new market dynamic and it dramatically changed Telecom’s role. More>>

ALSO:

Glass Half Empty: Dairy Prices Fall To Lowest Since 2012

Dairy product prices slumped to the lowest level since October 2012 in the latest GlobalDairyTrade auction, paced by whole milk powder and cheddar. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news