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Buoyed by the continuing strength of New Zealand’s capital markets, NZX recorded another quarter of solid growth in Q3 2013. Total revenue for Q3 2013 increased 11.5% compared to the prior comparable period in 2012, with the markets and infrastructure businesses up 26.9% and 9.9% respectively.
Capital markets activity continued to grow during the quarter. Initial Public Offering activity included the listings of Synlait Milk and Wynyard Group, both in July, and Z Energy in August. This activity contributed to a 35.8% increase in listings revenue.
Equity trading activity also continued to grow during the quarter with trading volumes and values up 38.6% and 21.3% respectively. This drove solid growth in NZX’s trading and clearing revenues, which were up 33.3% and 19.7% respectively.
Partially offsetting the positive markets business performance were the Information businesses, where revenues were down 2.4% compared to the previous period. Agricultural information revenues have still not fully recovered from the pullback in rural spending that resulted from the severe drought conditions in New Zealand earlier in the year. Securities information revenues during the period were impacted by the ongoing consolidation in financial services businesses globally, though terminal numbers did stabilise in Q3 2013 after a period of decline.
Q3 is traditionally the quietest period of the year for grain trading as it precedes the new harvest, and 2013 conformed to this pattern. However, tonnes traded on Clear Grain Exchange were up 12.9% in Q3 2013 compared to Q3 2012, resulting in a 6.0% uplift in revenue.
NZX CEO Tim Bennett commented: “NZX’s third quarter revenues reflect the excellent health of the domestic equity markets, which has a positive flow-on effect on our business.
“Looking ahead over the next year, the IPO pipeline remains promising and we are working hard to support a number of companies aiming to achieve their goals in this regard. Provided market conditions remain positive, this bodes well for NZX and New Zealand’s equity markets more broadly.”
Other developments
Following a targeted review of practice in exchanges internationally relating to conflict management, the NZX Board has established a Regulatory Governance Committee to assist the Board in fulfilling its governance responsibilities relating to NZX's regulatory function. A copy of the Terms of Reference of the Committee can be found at: http://www.nzxgroup.com/corporate-governance
On 30 September 2013, NZX announced that following a competitive tender process, it was advised by the Gas Industry Company that it has not been reappointed to the Gas Allocation Agent role.
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