Strong start as earnings sought

Trading in Fonterra's units helped boost the NZX in December, when cream made Christmas treats...
Trading in Fonterra's units helped boost the NZX in December, when cream made Christmas treats rich and satisfying. Photo supplied.
Trading on the NZX's cash markets rose by more than 24% in December but brokers are also reporting a strong start to 2013 as investors continue to look for income from their money.

The NZX-50 index at the end of December showed its best year of trading since 2004.

Trading on the NZX's cash markets jumped by a quarter in December, led by a surge in turnover of stocks as the NZX 50 Index marked its best year since 2004.

Total trades rose 24.3% to 78,408 last month from the previous corresponding period (pcp). The value of trading soared 61% to $3.6 billion.

Craigs Investment Partners broker Greg Easton said the NZX broke out its trades under $50,000. They rose 26% on the pcp and mainly consisted of retail investors.

''People are looking for income, rather than leaving their money in the bank. People are still hungry for that income and banks are not going to raise interest rates any time soon.''

There were two ''extraordinary'' trades in December which affected returns, he said. Trade Me accounted for $800 million of the $3.6 billion of value traded and the first week of Fonterra units trading was strong.

Mr Easton was confident January statistics, when released, would be significantly up on January last year.

''It's been a good start to the year. Thursday and Friday of last week were much busier than expected and today has been busy.''

Telecommunications stocks were being sought after. Their yields were attractive but the shares did not come without risk, he said.

Interest in Telstra was being driven out of Australia, but TeamTalk was being sought after in New Zealand.

Investors were also looking keenly at the Christchurch rebuild and were watching stocks like Fletcher Building, Methven, Tube & Steel and Cavalier, Mr Easton said.

Ryman Healthcare looked ''unstoppable''. Fairfax Media reported the provider of housing and health services for the elderly was aiming to be the top company on the NZX. It had already moved into the top five and its market capitalisation yesterday was $2.4 billion.

''The market will push them [Ryman] to the top,'' Mr Easton said.

The Ryman share price yesterday was $4.76, up exactly $2 from the same time last year.

The NZX 50 gained almost 25% in 2012, outpacing gains on Wall Street and in Australia. Yet the year was slimmer for new equity and debt capital raising through the NZX. About $1.75 billion was raised in December for a total in the year of $4.6 billion, down from $11.9 billion in 2011.

Of that, equity raised where the issuer had a primary listing in New Zealand fell to $999 million in the year, from $1.6 billion in 2011, while dual and secondary listed capital raisings fell to $3.3 billion from $9.2 billion.

There was $319 million raised through the issue of debt securities, down from about $1 billion in 2011.

Shares of NZX were unchanged at $1.23 and have gained 21% in the past 12 months.

Mr Easton said NZX chief executive Tim Bennett and his team could afford to be pleased by the latest statistics.

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