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

 


NZX expects modest growth, smaller listings ahead

NZX expects modest growth, smaller listings ahead

April 9 (BusinessDesk) – New Zealand’s stock exchange operator, NZX, is expecting to reap moderate growth from recent investments over the next two to three years, and to seek greater involvement in passive managed funds, where the local market has lagged Australia and the US.

Slides prepared for an NZX investor day presentation give no guidance on future earnings, but say “the focus remains on organic growth” and small acquisitions, particularly for new streams of saleable agricultural data.

NZX has “two to three years to realise the upside” of recent investments, says slides prepared for chief executive Tim Bennett, after a period of investment in new business lines that have delivered 7 percent compound annual growth in revenues since 2009. CAGR of 14 percent was achieved between 2003 and 2008, during the early years of previous chief executive Mark Weldon’s tenure.

The presentation shows the largest single source of activity in 2013 was listing fees and securities data, bringing in $20.2 million to provide 32.3 percent of total revenue, while capital-raising, trading and clearing was worth $14.7 million and represented 23.4 percent of activity.

The last year was characterised by two partial privatisations of state-owned electricity companies, MightyRiverPower and Meridian Energy, and a selldown to 51 percent government ownership of already listed Air New Zealand.

Over the next two to three years, trading, clearing and data revenues are expected to grow between 5 and 10 percent annually with no new investment required, while funds under management are projected to grow by between 10 and 15 percent annually and may attract “limited acquisition” spend.

“IPO activity is expected to be focused on smaller to medium size listings compared to 2013,” the presentation says, with a relaunched small cap board “not having an immediate impact on revenues” but creating a pipeline for future main board listings.

NZX expects trading and clearing volumes to remain “robust” and the exchange will launch two new funds management products in 2014 “to drive growth in funds management beyond 2013 levels.”

NZX equity derivative values were anticipated to grow from 2.5% to 20% of the cash market over five years, which was still “well below comparable markets.”

On the capital expenditure front, NZX says it is budgeting $2 million to $3 million to maintain business as usual, with potential for a clearing system upgrade in 2015/16 and a trading system upgrade in 2019, but that “no other multi-million dollar projects are currently contemplated.”

Growth in expenses, which topped $37.9 million in 2013, compared with $29.2 million in 2010, would slow as the current investment cycle ended.

NZX shares were up 0.8 percent in trading today, at $1.24.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news