Annual share turnover hits new high

By Phil Boeyen, ShareChat Business News Editor

Thursday 5th July 2001

The NZSE has posted a record turnover for the year ended June, up 13% on last year to $30.2 billion.

The number of trades also rose, up 2% to 707,000, and overall the market showed a 6% increase in the NZSE40 Gross Index to 3904.

NZSE Chairman, Simon Allen, says performance of the market over the year has been encouraging, and private investors appear to be returning to the market after a period of preferring to invest indirectly.

He says it's significant that the NZ Small Companies Gross Index continues to outperform the NZSE40 by 15 percentage points.

"The market has been criticised regularly for perceived underperformance. Yet mid sized companies also did well with the NZSEMC Gross Index up 23% to around 3900."

Mr Allen says one of the biggest difficulties for the NZSE is the question of investor confidence, and ultimately investment performance will be driven by individual company performance as a reflection of business and economic fundamentals.

"If economic and business performance is insufficient, private savers will find other avenues for their money, either though consumption or alternative investments, especially offshore".

Mr Allen also addressed the exchange's plans to demutualise in talking about the past year's performance, including the failed merge with the ASX.

He says the board of the exchange has debated the sovereignty issue at length, and recognised it is an issue as evidenced by the outcomes of the ASX discussions.

"We nevertheless feel that our markets and the exchange face open and unrestricted competition from offshore. Therefore we strongly believe that the current path is the correct one but have added the concept of a cap on ownership".

The NZSE says New Zealand would have had to bear the costs of any merger with the ASX, and the Australian exchange was not able to give any undertakings that it would help to develop the capital market on this side of the Tasman.

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