What Is the New Zealand Stock Exchange (NZX)?
The New Zealand Stock Exchange (NZX)—also known as New Zealand's Exchange—is the national stock exchange for New Zealand. The New Zealand Stock Exchange (NZX), based in Wellington, consists of the NZX Main Board, the NZX Debt Market, the NZX Dairy Derivatives, the NZX Equity Derivatives, and the Fonterra Shareholders' Market.
The purpose of the NZX is to provide a marketplace where the exchange's listed equities and funds can be traded. The NZX provides a platform for the buying and selling of liquid investments, offering investors access to market information and real-time stock quotes.
Key Takeaways
- The New Zealand Stock Exchange (NZX)—commonly known as New Zealand's Exchange—is the national stock exchange for New Zealand.
- The NZX provides a marketplace for investors to buy and sell the exchange's listed equities and funds.
- The NZX originated from the 1870s gold rush and has since evolved into a company owned and controlled by shareholders.
- The exchange also provides investors with various investment products and tools, such as access to savings, investment, insurance, research, and wealth management products.
- Companies that list on the exchange might seek to attract capital they can use to fund special projects, increase growth, or refinance debt.
Understanding the New Zealand Stock Exchange (NZX)
The NZX originated in New Zealand's 1870s gold rush when the country's four biggest gold mines served as financial centers and each had its own exchange. In 1915, the exchanges began operating under the newly formed Stock Exchange Association of New Zealand. In 1983, the New Zealand Stock Exchange was created and brokers' status within regional exchanges was widened to include national member status. The 1987 stock market crash prompted changes aimed at improving governance, revising the listing rules, and implementing more stringent broker educational requirements.
In 2002, in a move to begin changing the governance and ownership structure of the exchange, shareholders elected a board of directors and a chief executive. In 2003, the New Zealand Stock Exchange formally changed its name to the New Zealand Exchange Limited, trading as NZX. The company demutualized and listed on its own exchange. Shareholders have ownership and control of the NZX, while brokers act as market participants.
New Zealand Stock Exchange(NZX) Products
The NZX offers investors access to a variety of investment products and tools.
Exchange Traded Funds (ETFs)
Smartshares is a member of the NZX Group that issues exchange traded funds (ETFs) listed on the NZX Main Board. ETFs enable investors to create a diversified portfolio that includes a range of securities, such as government bonds and listed companies.
Investment and Insurance
The SuperLife program offers businesses and individuals various savings, investment, and insurance products. They provide superannuation plans that are pension programs set up by companies to benefit their employees. KiwiSaver is a voluntary savings program that helps New Zealanders save for retirement.
Wealth Management
The NZX owns and operates its own wealth management business called NZX Wealth Technologies. The company offers both large investment advising firms and small boutiques the tools and platform needed to manage and trade their clients' investment assets.
Dairy Research
Over the decades, the dairy sector has provided New Zealand with many employment opportunities and is an important contributor to the nation's gross domestic product (GDP). The NZX provides investors access to dairy reports, data, and insights.
The New Zealand dairy sector employed 46,000 workers and earned the nation NZ$18.1 billion in export revenue for the year to June 2019.
Investment Research
NZX Data Products produces investment research and information across the equities, agriculture, and energy markets. NZX has a company research center that enables private investors, financial planners, and fund managers access to current and historical analysis of New Zealand companies.
Investor Education
NZX hosts a virtual trading platform that enables new investors to learn about investing concepts and participate in virtual trading sessions. Investors can paper trade stocks via simulated trades without risking money.
Special Considerations
The NZX Main Board and Debt Market are home to a variety of businesses looking to benefit from the advantages gained from being listed on a stock exchange. These companies include managed funds, cooperatives, and debt and equity issuers. The NZX provides a platform for companies to attract the capital they need to accomplish a variety of things, such as increase growth, pay down existing debt, refinance debt, or fund special projects. In 2019, the NZX helped companies raise NZ$8.5 billion in total equity and NZ$6.3 billion in total debt.
FAQs
The purpose of the NZX is to provide a marketplace where the exchange's listed equities and funds can be traded. The NZX provides a platform for the buying and selling of liquid investments, offering investors access to market information and real-time stock quotes.
How do I buy shares on the NZX? ›
All NZX ETFs can be bought directly on the NZX using a brokerage platform (such as Sharesies, ASB Securities and Jarden Direct), using an investment platform (such as InvestNow), or by going directly to a sharebroker such as Forsyth Barr and Craigs Investment Partners.
Is NZX a good investment? ›
Over the last 7 days, the market has remained flat, although notably the Financials sector gained 6.2% in that time. Meanwhile, the market is actually up 6.3% over the past year. Looking forward, earnings are forecast to grow by 18% annually.
What is the role of the NZX as a market operator? ›
NZX Limited operates licensed securities and derivatives markets under a legislative framework established under the Financial Markets Conduct Act 2013. Those markets operated under a “self regulating organisation” (SRO) model. That means NZX is both an operator and a regulator of markets.
How does trading as work in New Zealand? ›
When you run a business in New Zealand, it must be registered with the NZBN or Companies Office. However, you may wish to use a name other than your registered name – this is known as a trading name. Your trading name is the name your customers recognise your business with.
How do shares work in NZ? ›
A 'share' is a small unit of ownership in a company. When you buy a share, you're buying a piece of a company. Each share represents an equal portion of the company's total capital – the more shares you own, the greater the portion of ownership you have. Shares can also be called 'stocks', 'equities' or 'securities'.
How do I cash out my shares? ›
Stocks can be cashed out by selling them through a broker on a stock exchange. Selling stocks can provide cash for major expenses or to reinvest in other assets.
Can foreigners invest in the New Zealand stock market? ›
Can foreigners invest in New Zealand? Foreign investment is crucial for the sustainable growth of our economy. The New Zealand Government welcomes foreign investment which is good for New Zealand.
What are the best shares to buy in New Zealand? ›
New Zealand stocks that increased the most in price
| Symbol | Change % | Price |
|---|
| MEL D | +1.09% | 6.025 NZD |
| FBU D | +1.07% | 2.83 NZD |
| EBO D | +1.00% | 35.50 NZD |
| GTK D | +0.92% | 10.98 NZD |
18 more rowsNew Zealand's Exchange (Māori: Te Paehoko o Aotearoa), known commonly as the NZX, is the national stock exchange for New Zealand and a publicly owned company.
New Zealand companies with the highest dividend yields
| Symbol | Div yield % (indicated) | Price |
|---|
| WHS D | 10.57% | 1.25 NZD |
| NZM D | 9.18% | 1.01 NZD |
| SPK D | 8.14% | 3.360 NZD |
| SDL D | 7.92% | 1.23 NZD |
29 more rowsAt a certain price, a day trader believes a specific company is 'undervalued' and will buy a shareholding waiting for the market to correct itself. Day trading is difficult on the New Zealand sharemarket, given the limited buying and selling that occurs.
How do I sell shares on NZX? ›
Selling shares online
To sell shares on the New Zealand Stock Exchange (NZX), you will need to know your Faster Identification Number (FIN). This information will be required to complete your order. Once you've everything sorted, log in to Online Share Trading and click either Place an order or Buy/Sell.
What markets does NZX operate in? ›
Today, NZX operates New Zealand's equity, funds, derivatives energy and carbon markets. To support the growth of our markets, we provide trading, clearing, settlement, depository and data services for our customers.
How do operators manipulate stocks? ›
Stock operators often employ order book strategies to manipulate stock prices for their own benefit. One such strategy is spoofing, where they place large buy or sell orders without the intention of executing them. This creates a false impression of supply or demand, luring other traders to act accordingly.
How does the New Zealand Emissions trading Scheme work? ›
Businesses participating in the NZ ETS must give the government one NZU for each tonne of emissions they produce. Carbon credits: these are financial instruments – things that can be bought and sold – that represent a unit of carbon dioxide equivalent or CO2e. One carbon credit is equal to 1 tonne of CO2e.
How does the NZ energy market work? ›
The wholesale market is where generators sell electricity and retailers buy electricity. Retailers then on‑sell that electricity to businesses and households across New Zealand. There are about 80 generation companies, 62 retailers and 6 gentailers (generator-retailers) in New Zealand's wholesale market.
How does the Maori economy work? ›
Customary trade
Prior to European arrival in New Zealand, the Māori economy was based on a barter system. Hapū (subtribes) and iwi (tribes) exchanged goods on a regular basis. Lands, fisheries and natural resources were under the jurisdiction of hapū and iwi.
How to get listed on NZX? ›
Listing criteria on the NZX include initial market capitalisation (minimum of $10 million), shareholder spread (at least 20% of the shares being held by 100 or more non-affiliated holders) and strict corporate governance and reporting requirements.
