Record share year

Press, 27 February 1986, Page 23

Record share year

Share trading was worth a record $1876M on the New Zealand Stock Exchange last year, 54 per cent ahead of the previous highest figure of $1220M set . in 1983.

The president of the Stock Exchange, Mr Rex Pearson, says in the annual report, that trading was also 66 per cent ahead of the 1984 figure of $1129M. At December 31, market capitalisation of all listed companies was 117.68, up 36 per cent from 1984’s $12.98. "Features of the market were record new capital raisings of $791.8M an increase of 56 per cent over the previous year; a

level of volatility rarely experienced, as a consequence -of the Government’s deregulatory policies, high interest rates, and the floating of the New Zealand dollar.” The number of listed companies grew from 281 in 1983 to 316 in 1985, and overseas listings rose from 66 to 81 in the same period. The 1984 figure from New Zealand companies was 300 and overseas, 61.

“It is pleasing to record a growth in the number of listed companies following the declines brought about by take-overs in the early 1980 s,” Mr Pearson says. A table in the report shows that market turn-

over in 1985 was double that of 1984 at just under 1600 M shares. The Stock Exchange is hoping that the changes it has made in the last two years will help raise turnover further.

“In market activity. New Zealand falls far behind North America. In the United States, the ratio of turnover to market capitalteation is between 60 per cent to 80 per cent range. In New Zealand, it is in the 8 per cent to 10 per cent range.”

It is hoped that the deregulated finance sector, the changes to the Stock Exchange’s own rules, the introduction of computer-assisted trading, and end to impediments such as stamp duty, will redress the turnover imbalance, he says.

The existing method of transferring securities is giving concern because of delays : in both their transfer, settlement of transactions, and the receipt of documents of title by purchasers.

Because of the deregulated financial sector there is a need to examine and reduce the costs of the present cumbersome system. Discussions were held with the Association of Share Registries on matters including the way securities are registered, the link between registries and the Stock Exchange by computer, and the electronic transfer of cash and securities after a change of ownership.