NZX profits up 40pc for March quarter

First quarter net profits at the NZX are up 40pc to $3.04m.

Sharemarket operator NZX lifted first quarter net profit 40 per cent from a year earlier to $3.04 million, despite turmoil in world financial markets.

Chief executive Mark Weldon said around half the improvement could be attributed to higher revenues and about half to discipline on the cost side.

Information businesses were positive, while some of the investment businesses and subsidiaries continued to perform strongly. That more than balanced some of the weakness on the listings and trading side, he said.

For the three months to the end of March operating revenue was up 7 per cent from a year earlier to $8.6m, while operating expenditure was barely changed at $4.3m.

In the NZX Markets Business operating revenues were up 5 per cent from a year before to $7.7m in the latest quarter.

That included a 39 per cent rise in information businesses' revenue to $3.9m, but total listings revenue was down 17 per cent to $1.8m, while trading, clearing and settlement revenue dropped 15 per cent to $905,000.

Weldon said NZX continued to streamline its information business products, and continued to tinker with its agricultural information products, and how those were distributed and priced.

At the same, the company had a continuing disciplined approach to cost management.

"We've done that by continual focus, rather than a one-time chop in headcount. We haven't done that at all."

NZX said it saw momentum returning and had a positive outlook, with indications including a record $1.36 billion in capital being raised in the March quarter including significant secondary equity.

Average daily trade numbers in the March month were 2112, the highest since last October, though for the whole quarter the 1913 daily average trades were down 9 per cent on a year earlier.

The total value traded in the quarter of $5.14b was down 29 per cent.

Weldon said signs were starting to appear that the market was sufficiently low.

"These things have a natural bottom. We've seen some real signs of life in March and April compared to January and February, and I think in some senses we've never been more positive about the long run prospects for the business."

NZX also announced today its new Clearing House clearing and settlement system is due to be launched on November 20.

That would enable futures and commodities markets to be launched this year.

"When we speak to overseas brokers and fund managers, anything in the soft commodities space would get them incredibly excited, so we would see real interest for New Zealand and future benefit for the capital market ... from success in that area," said Weldon.

In three to five years time he expected substantial market growth from those developments.

NZX shares were up 10c to $6.70 in early afternoon trading.

- NZPA