New Zealand Exchange

NZX

New Zealand Exchange Limited (formerly known as the New Zealand Stock Exchange) is a successor to many decades of a New Zealand non-profit stock exchange.

NZX has a number of initiatives, beyond the core business, positioned to either develop new business or capture value from related businesses, including:

NZDX: The debt market works well for non-investment grade issuers. To grow this market we need to add investment grade products. This is important to growing the range of savings products available to retail investors and will also bring in new participants. Success will require Securities Commission and government buy-in.
NZFOX: This trading facility remains ripe for development, with several brokers working through the stringent accreditation process. There is an appetite for Futures and Options trading in New Zealand, and its availability will bring us in line with international markets.
Smartshares: Smartshares offer investors a neutral investment product with transparent and continuous pricing. This business is targeted to capture the growth in ETFs and related products evident in other markets.
Link Market Services: This registry represents another significant investment targeting return from healthier and wider participation in the equity markets.
Within the wider environment
There are a number of infrastructure developments we expect to contribute to a continued growth trajectory, including:

Savings: NZX will play an active role to ensure New Zealanders have access to the information and products that will give genuine and uncomplicated choices for their savings.
Tax changes: Recommendations contained in the 2004 Stobo Tax Report will further improve the accessibility, and benefits of equity ownership for New Zealanders. Further, an active stock lending market, facilitated by access to standard tax treatment of securities lending, is a key component of mature, liquid equity markets.
New listings: There are many as yet untapped opportunities for a range of companies and industries to share the benefits of the New Zealand market. Listings at the upper end of company capitalisation (greater than $500 million) add new and sustainable revenue through listing fees and drive growth in transaction numbers, encouraging more international interest in New Zealand markets. Among those with this potential are the rural and energy sectors and local subsidiaries of offshore companies. Listings at the smaller end of the market are critical for growth and injecting a capital market mindset into New Zealand business. The NZAX market moves into its second full year with a healthy infrastructure of sponsors and potential listings.
Market information: Demand for information is tied to activity levels and listings, so this revenue source continues to grow. NZX’s market information assets create further options for introducing new products and services.
Throughout 2005, NZX will continue to seek investment opportunities that leverage our existing assets and extend our exposure to the continued healthy development of New Zealand capital markets.

The NZX team is uniquely skilled to assess and capitalise on these opportunities, to make sound judgements and develop intelligent solutions that will truly unlock the value of New Zealand’s capital markets for investors and shareholders, and contribute to the economic well-being of this country.

In the late 90s, after a decade of corporatisation and privatisation introduced by the Government, the stock exchange followed suit and was corporatised. Shortly thereafter it changed its name and listed itself.

Most companies listed on the NZX have share prices below NZ$10. New Zealand companies seem to prefer their share price to have the psychological 'low price' appearance. By contrast, stocks on the American exchanges have average share prices of US$40 (NZD 65.4

History

Gold Rush Years
NZX began during the Gold Rush of the 1870s in financial centres of early gold fields: Auckland, Thames, Dunedin and Reefton. As gold supplies dried up, so did the Thames and Reefton exchanges, but by now Auckland and Dunedin had grown, along with Wellington and Christchurch where exchanges had also been established.

Law and Order
Needless to say, these early exchanges were basic, but things changed in 1872 with the formation of the Auckland Sharebrokers' Association. In 1908 the Sharebrokers Act introduced compulsory licensing for sharebrokers and by 1915, the Stock Exchange Association of New Zealand had been formed to co-ordinate the activities of the then autonomous stock exchanges throughout the country.

The '20s
After a depressed market during the First World War, the New Zealand economy entered a boom in the mid 20's. Government roading, rail and hydro electric projects increased business for regional exchanges as money for public works was raised partly on the local equities market. This period also saw the launch of the New Zealand Stock Exchange Gazette, a publication produced by the Stock Exchange Association.

The '30s
In 29, the stock market crash wiped hundreds of millions from Wall Street, sending the United States into the Great Depression. However due partly to the continued investment in public works and closer economic ties to England, the New Zealand stockmarket remained relatively buoyant. In 1937, the new Labour Government's increased regulation of the New Zealand economy saw many investors trade their shares for fixed investments.

Post War Years
Following a conservative period of market activity during World War II, the 50s saw a marked increase in women investing on the stock market. This coincided with a new initiative by the Stock Exchanges to improve the standard of public awareness of the market by relaxing the rules concerning advertising and publications and public statements to the market by individual brokers.

The Black Budget
In 1957, the Labour Government released its infamous Black Budget. Finance Minister Arnold Nordmeyer's tax increases hit both dividends and company profits hard, sending investors fleeing to Australian stocks. However, contrary to expectations of brokers and investors, the Black Budget did not completely suppress market activity.

'60s
In 1960 the National Government scrapped a dividend tax, boosting confidence in an already healthy market. Around the same time, New Zealand’s first Unit Trust was formed and in 1962, the Post trading system with its familiar blackboards and "chalkies" replaced the older, slower call system of trading.

The '70s
In 74, the regional stock exchanges amalgamated to form a national Stock Exchange. In 75, in response to a rapidly growing market, a new Code of Ethics was drawn up for the new exchange and a Disciplinary Council established.

The '80s
In 84, the Fourth Labour Government's fiscal reforms deregulated the banking industry and scrapped interest rate controls. Money poured into the nation, attracted by higher interest rates. New aggressive investment companies such as Brierley, Chase and Equiticorp became the new blue chip stocks. Artificially inflated by asset revaluations, the market continued to climb until following a drop on Wall Street, the New Zealand stock market crashed spectacularly (Tuesday, 20 October 1987).

After the Crash
In 89, the NZSE underwent a number of major changes to improve accountability and financial responsibility of its members and companies. A Board of Directors was appointed and the Exchange introduced a new independent Market Surveillance Panel and revised Listing Rules. Members also voted to do away with separate regional exchanges and the management of the trading floors became the responsibility of the Board of the Exchange.

The dawn of technology
On June 24 1991 an era ended with the implementation of a computerised Screen Trading System and abolition of open outcry market carried out at regional trading floors. The regional trading floors were closed and there is now only one national market for New Zealand. On August 1 1992 the Exchange introduced its FASTER system of electronic transfer and moved to fully automated clearing and settlement of trades on May 18 1998.

In September 99 the Exchange installed a new world-class FASTER trading platform to replace the initial screen trading system.

Demutualisation
Beginning in 97, the Board and Directors of New Zealand Stock Exchange commenced a series of strategic reviews to assess the future of the Exchange. The result was a recommendation to the Member Firms of the Exchange to vote for demutualisation - recognised internationally as 'best-practice' model for facilitating growth and development.

On October 16 2002 the members of the New Zealand Stock Exchange voted in favour of the demutualisation proposal, and on 31 December 2002, NZSE became a limited liability company. Each former member was issued with 10,000 shares in a newly formed company.

A new name - a new company
With demutualisation complete, the NZ Stock Exchange had a new strategic focus - to grow the markets and unlock value for all market participants. As a result of a strategic review put in place by new Chief Executive Mark Weldon, it was decided that a new name would be necessary to represent the newly formed organisation more accurately and enable the company to communicate its intention to operate with a new mandate of growth, profitability and change. By renaming the organisation, the company signalled to the market that it was not only taking on a new image and name, but a new mandate and a new focus.

On May 30 2003, New Zealand Stock Exchange Limited formally changed its name to New Zealand Exchange Limited, trading as NZX. At the same time, NZX announced a branding strategy for its markets, resulting in the NZSX Stock Market, NZAX Alternative Market and NZDX Debt Market.

New Zealand Exchange Limited
Level 2, NZX Centre
11 Cable Street
PO Box 2959
DX: SP23501
Wellington, New Zealand

Telephone:+64 4 472 7599
Facsimile: +64 4 496 2893
Email: info@nzx.com

Trivia
Wellington (Te Whanganui-a-Tara or Poneke) is the capital of New Zealand, the country's second-largest urban area and most populous national capital in Oceania. Wellington stands at the southern tip of the North Island in the geographical centre of the nation.

New Zealand's major financial institutions are divided between Wellington and Auckland, and some organisations have headquarters in both cities. It is New Zealand's political centre, housing Parliament and head offices for all government departments and ministries. Wellington is often described as New Zealand's cultural centre, boasting a world-class film and theatre industry, Te Papa (the Museum of New Zealand), the New Zealand Symphony Orchestra and the Royal New Zealand Ballet. Its compact city centre supports an arts scene, café culture and nightlife much larger than most cities of a similar size.

Links on websites on subject

http://www.ise.ie/index.asp The home page of Irish stock exchange

http://www.nasdaq.com/ The homepage of the stock exchange

http://www.cityequities.com/
http://www.moneyweek.com

government_bond information

Other Lonympics sites