NZX prepares for commodity trading, dairy derivatives in rural drive

Thursday 21st May 2009

NZX, manager of New Zealand’s stock exchange, plans to move into commodity trading in the next 12 months, extending a drive into agriculture that has seen it snap up rural data and media companies.

The Wellington-based company named Fiona Mackenzie as head of liquidity and traded products and said she will help set up “a base for new tradable futures and commodities products.” Mackenzie has been in institutional equity sales at Morgan Stanley.

NZX is planning to launch a new clearing house on Nov. 20 that will bolster the risk profile of NZX Markets and broaden the product set available to investors, it said in a statement. “Equity options, index futures and dairy commodity derivatives products will be launched in a phased approach over the next twelve months,” it said.

The company’s acquisitions include the Agri-Fax data business and rural media and data assets in Australia and New Zealand. It is also acquiring the spot electricity market platform, M-Co. Its foray into agriculture, a sector inhabited by companies of global scale such as Fonterra Cooperative Group, may provide the best route to deepening the nation’s capital markets, which only amount to about a third of gross domestic product.

Fonterra chairman Henry van der Heyden is on NZX’s board of directors and the cooperative – the world’s biggest dairy exporter – has its own plans to expand the online auction system, known as globalDairyTrade, to become the premier market for global dairy product trading.

The online trading platform is managed by Boston-based CRA International, which last month rolled out a similar system for Ocean Spray, North America’s biggest juice company, to trade fruit concentrates.

NZX head of market products Geoff Brown said an upgraded clearing and settlement system and improving liquidity for the NZX Markets “are key priorities for NZX this year.”

Shares of NZX rose 0.1% to $8.25 and have soared 50% this year.

Businesswire.co.nz

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