NZX first-quarter revenue edges up with busier secondary market

Friday 20th April 2018

NZX's first-quarter revenue edged up 0.8 percent as activity on the secondary market remained busier and its burgeoning funds management unit continued to swell, offsetting the lack of new issuers.

Revenue rose to $17.9 million in the three months ended March 31 form $17.7 million a year earlier, Wellington-based NZX said in a statement. Issuer relationships remained its biggest income generator at $5.3 million, down from $5.9 million a year earlier as listing fees remained flat. Secondary markets revenue was more robust, up 10 percent to $4.1 million with double-digit gains in securities trading and securities clearing.

NZX is doubling down on its core markets business, with a particular focus on improving liquidity on the local market, and is consulting with industry on how to get more trading through the formal market as opposed to off-market trades, which is seen as undermining efforts to lift price transparency.

As part of that plan, the stock market operator is overhauling its price structure, bringing its trading and clearing model into line with global practice, and a pilot using a tailored pricing structure that started in July has been successful in lifting on-market trading.

Today's figures show NZX's data and insights division reported a 6.4 percent decline in revenue to $2.6 million while agri revenue was flat at $1.9 million.

NZX's funds service division boosted revenue 15 percent to $3.9 million, with funds management delivering a 21 percent gain in sales to $3.6 million, largely matching the growth in funds under management for its Smartshares funds, which sat at $2.22 billion as at March 31.

The company forecasts operating earnings of between $28 million and $31 million in calendar 2018, compared to $29 million last year.

The shares last traded at $1.08 and have declined 3.6 percent so far this year.

(BusinessDesk)

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