NZX annual profit soars

HAMISH MCNICOL
Last updated 09:38 21/02/2014
timbennett

NZX CEO Tim Bennett.

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A record year of company listings and trading activity has boosted the New Zealand stock exchange's profit to $12.1 million.

The NZX announced today its net profit was up 22.6 per cent for the year ended December 31.

This was boosted by revenue of $62.8m, which was up 12.2 per cent on the previous year.

Strong results in the capital markets businesses, the operation of the energy markets and the Fonterra Shareholders' Market were partly offset by a slower in year in the NZX's agri business, which was hit by the worst drought of 70 years.

Chief executive Tim Bennett said activity in the New Zealand capital markets in 2013 was at its highest for more than a decade.

"Driving this activity is what we consider are structural changes in the market, including the growth of KiwiSaver, and a more positive New Zealand and global economic environment."

Revenue for NZX's capital markets business was up 18.2 per cent to $35m.

There was 10 new listings during 2013, a 10-year high in initial public offering (IPO) activity.

This resulted in new capital of $7.5 billion, from listings that included Meridian Energy, Mighty River Power, and Z Energy.

Bennett said the level of IPO activity was of long-term benefit to the capital markets.

"It adds greater depth to the market, a broader ranger of investment opportunities for New Zealanders and, particularly in the case of the Government share offers, brings new investors into the market," he said.

Securities trading revenue increased 34.4 per cent, as the number of trades and the value traded last year both grew more than 30 per cent.

But 2013 had been tough on New Zealand's agricultural sector, as severe drought conditions affected the first half of the year.

NZX's agri revenue fell 2.9 per cent to $12m.

The NZX had also reduced the carrying value of its Australian business Clear Grain Exchange by $2.4m, as revenue on the trading year fell 22.4 per cent.

The NZX said it expected 2014 IPO activity would be focused on smaller to medium-sized listings, when compared to 2013.

"The medium-term growth opportunities are significant across most of the businesses that NZX is involved in," Bennett said.

"Coupled with this, the Financial Markets Conduct Act provides the flexibility to introduce different types of marketplaces."

A final divided of 1.6 cents a share was declared, to be paid on March 21.

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- © Fairfax NZ News

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