NZX cash trading keeps climbing in May as new bonds revive debt market

Trading on New Zealand's NZX climbed for another month in May as the benchmark stock index reached new highs and a flood of new bonds drove activity in the debt market.

The volume of total trades rose 39% to 173,379 in May from the same month a year earlier, more than the 142,769 in April, with the value up 46% to $4.3 billion from 2015 and $4.1 billion in April, NZX's monthly shareholder metrics show. The daily average value traded was up 40% at $197 million from May 2015, just below the $204 million a day achieved in April.

The S&P/NZX 50 index has achieved new records, breaching 7000 for the first time in May as the local bourse and its relatively high dividend yield attracts a glut of international money in search of real returns in the face of low interest rates. At the same time, those low rates have spurred companies to return to the debt market for funding, injecting life into the local debt market.

Today's metrics show total equity trades in May were up 39%, for a 44% gain in value traded to $4.1 billion, while debt transactions rose 39% to 3662 for a 109% jump in value traded to $195 million.

Some $1.15 billion of new debt was listed on the NZX in May, taking the year-to-date tally to $2.55 billion, outpacing the $580 million value of initial public offerings and compliance listings in the month and $610 million in the year so far.

Total capital raised in May totalled $294 million across 19 events, of which $206 million was primary equity, $4 million of dual and secondary equity, and $84 million of debt. About $808 million of new capital has been raised so far this year.

The number of equity securities listed on the NZX was unchanged at 171 in May from a year earlier, while debt securities were up 16% at 93 and other securities more than doubled at 28.

Among other metrics, NZX's SuperLife unit lifted funds under management 15% to $1.53 billion from a year earlier, and Smartshares rose 166% to $1.62 billion. NZX Wealth Technologies increased funds under administration 7.2% to $1.36 billion.

Grain trading rose 17% to 524,765 tonnes traded from a year earlier, while derivatives trading dropped 38% to 11,260 lots traded and open interest declined 13% to 21,174 lots.

NZX shares last traded at $1.02 and have fallen 4.7% so far this year.

(BusinessDesk)