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NZX’s main board drives growth in volume, value of trading

NZX’s main board drove growth in volume, value of trading last month

Dec. 3 (BusinessDesk) – The value and volume of trading rose on NZX Ltd.’s main board last month, driving the first overall increases since March, as America’s second round of quantitative easing helped equity markets to rally.

Total trades on the NZX rose 5.8% to 49,216 in November and the value of trading climbed 9.6% to $2.2 billion, the stock exchange operator said in its monthly operational report. On the NZX Main Board, the volume of trades rose 6.6% to 45,230 and the value gained 12% to $2.1 billion.

A revival of trading on the NZX may help soothe concerns that the bourse is losing critical mass and becoming less relevant to New Zealand investors, as the flow of new issues dries up and few companies appear willing to test market appetite with an initial public offering. In November, just $13 million of new equity capital was raised on the NZX.

“The current lack of IPOs, waning international investor interest, and poor market liquidity are not simply a post-recession pause,” JBWere strategist Bernard Doyle said in a submission to the Savings Working Group last month. “They are indicative of an equity market in structural decline, which has become self-perpetuating.”

Activity in the nation’s biggest stocks helped make up for weaker turnover on the NZX Alternative Market, which recorded just 163 trades, worth $550,000. That amounts to just 0.1% of the $400 million market capitalization of the NZAX and a 73% slump in value of trade in the latest month.

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On the NZX Debt Market there were 3,823 trades in November, down 0.8%, while the value of trading fell 22% to $93 million.

Total NZX-listed issuers were 218 last month, down from 231 in the same month of 2009.

The NZX 50 Index slipped about 1% last month and was recently at 3299.776. During the month, the index reached its highest levels since April while on Wall Street, the Standard & Poor’s 500 Index rose to its highest since late 2008.

Shares of NZX were unchanged at $1.48 today.

(BusinessDesk)

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