New Zealand's Capital Markets
The solid performance of New Zealand’s capital markets continued in 2016, with market activity demonstrating sound growth, and resilience, despite a backdrop of global volatility.
Foreign ownership in New Zealand equity markets increased to 36.3% from 32.6% in 2015, taking it to the highest level in five years.
In December 2016, investors in NZX listed companies were made up of:
- 23.2% New Zealand retail investors
- 21.5% New Zealand managed funds
- 19.0% New Zealand strategic stakes
- 4.9% offshore strategic stakes
- 31.4% other offshore owners
The above data was taken from JBWere Foreign Ownership Survey: New Zealand 2016.
NZX Markets (as at 31 December 2016)
The S&P/NZX 50 Index benchmark achieved two significant milestones during the 2016 calendar year, with the index exceeding 7,000 points for the first time in May, and the ratio of equity market capitalisation to Gross Domestic Product peaking at 50.1% in July. This was a significant milestone given this ratio was as low as 25.0% in February 2009 and in mid-2012 had still only risen to 27.6%.
Trading volumes increased 19.8% on the prior year, as overseas investors turned to New Zealand in search of lower volatility and higher yields, while total valued traded was up 5.5%.
In 2016 NZX welcomed Tegel Group Holdings, NZME, Investore Property, New Zealand King Salmon and Tilt Renewables to the Main Board in 2016, and Oceania Natural and Marlborough Wine Estate Group to the NXT Market.
NZX’s Debt Market
The performance of New Zealand’s listed debt market was another notable highlight of 2016. Debt market capitalisation was up 29.7% to $25.7 billion following the listing of $6.4 billion of new debt in 2016, demonstrating that this product is meeting the needs of the market extremely well, and highlighting its attractiveness as a capital raising option for corporates, banks and local and central government.
NZX Derivatives Market
Despite the low levels of volatility in the dairy commodities market impacting derivatives market volumes in the first half of 2016, the number of end-users accessing NZX’s Dairy Derivatives market continued to climb up 67%, reinforcing the markets global popularity and long-term growth potential.
In 2016, NZX launched milk price futures and option contracts, adding to its suite of risk management tools. These contracts have experienced significant growth since launch, trading over one million kilograms of milk solids (kg/ms) in the first three months, and more than 26 million kg/ms in 2016.
For further information about NZX's Derivatives Market please visit: nzxfutures.com