Individuals show greater interest in NZ sharemarket

Mark Weldon, chief executive of NZX. Photo / Getty Images

Individual investors are warming to the New Zealand sharemarket, going by NZX data for the 2011 year.

The data shows that trades of under $50,000 in value were up by 40 per cent over the year, partly reflecting greater interest from individual shareholders.

Technical changes to the NZX's "tick" rules, which allow prices to move in half-cent increments compared with 1c previously, also played a part in improving liquidity, NZX chief executive Mark Weldon said.

Total sharemarket trades were up 37.1 per cent to 740,601 for the year, the NZX data showed.

In terms of share trades, NZX's track record compared favourably to other exchanges in the region, such as Hong Kong and Singapore, Weldon said.

"It really has been a New Zealand story rather than a global equities story driving volumes, so that is very positive."

Last year's listings for Trade Me, Summerset and for the Telecom offshoot, Chorus, had also acted as a catalyst for renewed interest in the market, he said.

The relative absence of finance companies, combined with the major banks offering low interest rates for deposits, meant that investors were becoming more aware of the "yield" stories offered by some stocks.

At the same time, exchange rate volatility could have acted as an incentive for investors to look closer to home rather than investing overseas, he said.

The picture was not so rosy for debt transactions, which fell by 14.3 per cent over the year.

Total equity transactions were worth $27.4 billion in 2011, an improvement of 27 per cent on 2010 in dollar terms. Just under $12 billion of new capital was raised on the NZX last year compared with $3.2 billion raised in 2010.

The NZSX 50 index dropped by 1 per cent over the year. The NZX itself was one of the best-performing stocks in 2011. The stock traded yesterday at $2.41, up 50 per cent from this time last year.