Capital raisings continue on NZX

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Companies have continued to rely on the markets to raise capital, with the amount raised in the first six months of 2009 more than twice as much as a year ago.

Last month, $604 million in debt and equity was raised on the NZX. That boosted the total capital raised for the first half to $4.56 billion, the bulk of it in the first four months.

That compared with $2.07b raised in the first half of 2008, and was higher than the $3.1b raised for all of 2008.

Equity raised in the last six months totalled $1.69b, and there was $2.87b of debt raised.

In many cases, companies wanting to pay down debt and improve their balance sheets had raised capital on the markets as a cheaper and easier option than approaching banks.

For June, BNZ raised $260 million of debt, and AMP NZ Office Trust, NZX and Kiwi Income Property Trust raised secondary capital.

"We expect demand for debt and equity to remain strong into the second half of the year," said NZX head of trading and liquidity, Fiona Mackenzie.

Last month's trading activity was mixed, after first hopeful signs of a possible recovery showed up in May.

"Total trade numbers have been up on the same period last year for the last two months and major indices are now showing gains year to date," Ms Mackenzie said.

The daily average number of trades on the exchange in June was down 4 percent from a year earlier at 2432, the daily average value traded fell 16 percent to $108m, and the total value traded fell 12 percent to $2.2b.

On a monthly basis, the number of trades was down in June from a month earlier, but the daily average traded was up. The May figure of $105m had been the highest recorded since last September.

The number and value of trades fell on the NZX main board and the alternative NZAX from a year earlier. On the debt market, the number of trades jumped 49 percent to 3833, but the value of NZDX trades fell 25 percent to $136m.

Total market capitalisation of $49b, equivalent to 27 percent of gross domestic product, fell 12 percent.

NZPA