By Rebecca Howard
Jan. 9 (BusinessDesk) - NZX trading activity lifted in December but the value dipped on the year as the stock market operator's efforts to drive more activity led to smaller transactions.
Total trades rose to 239,051 in December, up 37.1 percent from the same month a year earlier, NZX's monthly shareholder metrics show. However, the total value dropped 16.6 percent to $2.5 billion from December 2017.
NZX has made it a priority to shift more activity onto the formal market as a means of improving price transparency and driving greater liquidity in listed securities. That includes a new pricing structure designed to encourage more activity, updated listing rules, and consolidating the three equity boards into one.
So far the trend has moved in the right direction, with on-market activity accounting for 57.2 percent of value traded in December, up 11 percent on the year.
The size of transactions has shrunk with the increased use of algorithmic trading, with the average on-market trade size down to $8,800 in December, 25.5 percent less than a year earlier.
The equity market still dominates NZX trading, with 236,539 transactions worth $2.4 billion. Of that, 55.8 percent by value was done on market.
The metrics show 2,512 debt transactions worth $87 million in December, down 34 percent.
For the year, the total number of trades climbed 58 percent to 3.25 million. By value, trading fell 13 percent to $38.2 billion, but 53.4 percent of that was through on-market activity - a 27 percent increase from 2017.
New equity listings were non-existent in December, although $575 million of new debt was added to the NZX as corporates continue to find the listed debt market an attractive alternative to bank funding. Just $20 million of new capital was listed in 2018 through a compliance listing, compared to $4.9 billion of new debt.
In the secondary capital market, $372 million of new debt and equity was raised in December bringing the annual total to $4.6 billion. Of that, $1.5 billion came from New Zealand issuers, $668 million from dual or foreign issuers, $830 million from domestic funds, $187 million from dual or foreign funds, and $1.45 billion of debt.
NZX had 312 listed securities at the end of December, up 5.1 percent on the year, largely due to a 16.8 percent rise in debt securities to 132. Equity securities were down 5.5 percent at 138.
The market's equity capitalisation was $133.2 billion, or 46.2 percent of GDP, at the end of December, down 1.4 percent on the year. The value of debt rose 14.3 percent to $30.15 billion, or 10.5 percent of GDP.
The benchmark S&P/NZX 50 index ended December at 8,811, up 4.9 percent from a year earlier.
Activity in the stock market operator's derivatives futures market was 15.2 percent higher in December, with 28,226 total lots traded. Options rose 36.1 percent to 2,450 and total open interest increased 35.3 percent to 70,576.
Professional wholesale data terminals rose 0.1 percent to 6,066 from a year earlier, while retail terminal numbers increased 4.4 percent to 1,314. Dairy data subscriptions rose 24.4 percent to 963.
NZX shares last traded at 98 cents.