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The New Zealand Stock Exchange has this week launched two new bond indices in response to a growing debt market.
Debt indices are typically used by professional investors to benchmark the performance of fixed interest investments. The two new indices, called NZX Kauri Bond Index and NZX Composite AAA Bond Index, are alternative benchmarks to the existing Government, Corporate Bond and Swap indices.
The release of Kauri Bonds surged last year after the Reserve Bank expanded the range of securities it accepts as collateral from local banks at its overnight repo operations.
Kauri bonds are issued in New Zealand dollars by foreign issuers. They usually target institutional investors and are not traded on the local exchange.
Kauri issuance last year soared to $6.7 billion, seven times the amount in 2006.
