NZX ETFs down, derivatives up

NZX exchange-traded funds (ETFs) have suffered a big fall in funds under management, but the company's derivatives and grains trading markets are on the rise.

Monday, January 9th 2012, 3:47PM

by Niko Kloeten

The NZX monthly shareholder metrics for December show funds under management across the five Smartshares ETFs fell 14.3% year-on-year to $294 million.

The total number of units on issue also fell, down 6.3% to 171 million.

In a torrid year for share markets the NZX 50 index fell 1.0% year-on-year to 3,275 points, while the NZX 50 portfolio index fell 3.3% to 1,940 points.

However, fixed interest performed better, with the ANZ A-Grade Bond index up 9.3% year-on-year to 3,801 points, and the ANZ All Swaps Index up 10.7% to 157.

The market capitalisation for equity (down 0.3% to $55.9 billion) and debt securities (down 0.1% to $16.0 billion) saw little change compared to December 2010.

Volatile conditions have triggered an increase in trading activity on the exchange, although trading volumes have barely shifted.

Total trades in December were up 43.2% year-on-year to 63,072, while the total value traded increased only 1.3% to $2.3 billion, with a daily average value of $113 million, up 6.7%.

In the year to December a total of $11.8 billion in capital was raised by all issuers, including $1.55 billion in December.

The biggest changes year-on-year were in the derivatives and grain trading markets, areas the NZX has expanded into as it looks to diversify its business beyond its role as the stock exchange operator.

The number of derivative lots traded in December increased more than tenfold from the same month in 2010, up 1,132.6% to 1,171 lots traded, albeit down from November.

Meanwhile, the number of open interest contracts increased by 3,876.3% year-on-year to 6,362 in December.

Grain trading has also seen a boost, with 157,600 tonnes traded in the season to December, up 137.6% compared to the same period in the previous year.

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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