NZX trading volumes ease, debt sales stall

NZX trading volumes ease in September, new corporate bonds sales stall>

By Paul McBeth

Oct. 6 (BusinessWire) – Trading volumes on NZX Ltd.’s markets eased last month from a year earlier, suggesting this year’s rally, which drove the NZX 50 Index to a 12-month high, has reduced opportunities to buy ‘cheap’ shares.

Total trades slipped 3% to 56,490 in September from the same month in 2008 and climbed 6.7% from August, the bourse operator said in its monthly operational report. For the first month this year, no new debt sales were recorded, though Craig Brown, who helps managed the equivalent of $3.3 billion for ING NZ, expects this to be a timing issue rather than loss of appetite and he predicts more corporate bond sales this year.

“Vehicles such as listed property trusts are looking at alternatives to sourcing their funds rather than relying on banks for debt,” Brown said. “Corporate bonds are a good way to get that support.”

NZX markets shed 29% of their market capitalisation in September 2008, when Lehman Brothers collapsed in the U.S., and sparked fears of a worldwide financial collapse which saw companies tap investors to bolster their balance sheets. This year some $5.34 billion has been raised through equity and debt sales, up 145% from last year.

Companies have raised $3.02 billion this year from selling debt securities on the NZDX market, and total trades surged 36% to 4,374 from the same time last year, though they were down from last month’s 4,558.

“Things are moving in the right direction and we are seeing evidence of confidence returning to markets,” said Fiona Mackenzie, head of traded products & liquidity at NZX. “We also saw continued performance from the debt market where retail trading remains strong, with activity levels providing tighter spreads and improved quality and depth of pricing.”

The total value traded across the company’s markets fell 9% to $2.3 billion in September from a year ago, though it was unchanged from August. The daily average value traded dropped 9% to $107 million from September 2008.

The value of securities traded on the NZSX market sank 8% to $2.19 billion, while the total number of trades dropped 5% to 51,823.

Total trades on the NZAX fell 2% to 293 and the value traded tumbled 56% to $2 million.

Shares of NZX were unchanged at $8.00, and have soared 66% this year, making it the second-most successful company on the bourse.

(BusinessWire)

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