NZX Sees Solid H1 2020 Results, Retail Participation at Record Highs

The New Zealand Exchange (NZX) has published its financial results for the first half of 2020, revealing an uptick in operating earnings, profit after tax and trading activity during the period.

With the coronavirus pandemic creating heightened market Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term, the Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term reported record trading activity, both in terms of retail investor participation and on-market trades.

According to the Chief Executive Officer (CEO) of NZX, Mark Peterson, the popularity of online retail trading platforms is burgeoning and the COVID-19 pandemic has resulted in retail participation in the country’s sharemarket at levels never seen before.

In particular, trading by retail investors on the NZX’s secondary market was around $2.1 billion for March and April. This represents a growth of 135 per cent year on year. Furthermore, the number of trades was up by 361 per cent year on year or 1,264 per cent over the past five years.

NZX saw the daily number of trades average 48,000 during the first six months of 2020. By early June, the number of trades achieved during the year exceeded the total trades executed across the whole of 2019.

Value traded on NZX’s markets was also markedly stronger, increasing by 52.3 per cent to nearly $28 billion. According to the statement released by the exchange, effectively this is three months ahead of 2019’s performance.

On-market trading also continued its positive trend, averaging 62.4 per cent across H1 of 2020. This is greater than the 54.3 per cent average in 2019 and performed much better than the 33 per cent average, back in 2015.

Profit Soars by 40.9% YoY for NZX

Aside from trading, NZX revealed in its report published today that operating earnings increased by 21.5 per cent to reach $17.6 million. Net profit after tax came in at $9.1 million, which is higher by 40.9 per cent year on year.

Commenting on the results, Peterson said in the statement: “While we have had to adjust to a very different business and working environment and reassess priorities as a result of COVID-19, our focus has been on meeting increased demand through a time of need from our customers, and this shows through in the lifts achieved in revenue and operating performance.”