Tamsyn Parker

Tamsyn Parker is the NZ Herald's Money Editor

Stocks cap off sterling year

Big Trade Me and Fisher & Paykel deals come to fruition in last month of 2012.

Moa Beer was the only pure equity listing. Photo / Greg Bowker
Moa Beer was the only pure equity listing. Photo / Greg Bowker

The number of sharemarket trades hit a record high in December capping off the best year for the New Zealand stock market since 2004.

It's typically a quieter time of year for the sharemarket, yet more than $3.25 billion worth of securities have been traded this month, making it the best December since 1986 when records began.

NZX records show the closest December was in 2006 when $2.4 billion in trades took place.

BT Funds Management analyst Matt Goodson said the December record was "no surprise" given the level of activity which occurred.

Topping the list for December's big deals was the sell-down of the remaining 51 per cent of Trade Me, owned by Australian media company Fairfax, which saw $769 million worth of shares change hands.

The biggest takeover deal to happen this year - Haier's bid for Fisher & Paykel Appliances - was also finalised in December with $741.6 million in shares being sold.

The NZX50 index has risen more than 24 per cent this year - its best performance since 2004 when the index rose 21.17 per cent.

Hamilton Hindin Greene director Grant Williamson said low interest rates were key to the strong sharemarket performance.

"There are a big number of investors out there not happy with the returns in the bank that have had to take the jump into the equity markets."

Williamson said new savings from retirement savings scheme KiwiSaver had also pushed the market up as well as foreign investors seeing New Zealand as a good place to put their money. "We've had the perfect storm this year. Demand has outstripped supply."

Both capital raisings and new stock market listings were down for the year. Total capital raising, including existing companies raising money and new security listings is likely to be around $4.5 billion - less than a third of the $15 billion raised last year.

And despite the strong year for the sharemarket there were very few initial public offerings. Beer-maker Moa was the only pure equity listing while units in the newly listed Fonterra Shareholders Fund attracted $525 million.

The much-promised partial listing of Mighty River Power was put off until 2013.

Williamson was wary of a repeat performance next year. "I don't think investors should expect the market to perform as well, but at the same time I don't see conditions changing."

He expected interest rates to remain low while new money coming into KiwiSaver would continue to feed into the exchange. "What we should see is additional supply."

BT's Goodson said the partial floats of the state-owned power companies seemed likely to get across the line in 2013 giving retail investors more options and more capital raisings from existing listed companies.

Goodson said conditions were also right for new listings outside of the SOEs, particularly in the small and mid-cap sized companies.

A back-door listing of the Mad Butcher has been set for the New Year.


Good year

24%+ NZX 50 index up this year

12/12 Best December for trading since records began in 1986

$3.25b + Worth of securities traded in December alone Yesterday's trading, B12


Big deals

$741.6m Haier's bid for Fisher & Paykel Appliances

$769m Trade Me selldown

$525m Fonterra Shareholders Fund

- NZ Herald

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