New Zealand Stocks Shares Investments

Stocks and Shares in New Zealand 

Buying stocks and shares can be a great investment, and for many New Zealanders it is a profitable hobby. It tends to be more hands-on investment experience rather than investing through managed funds, and would generally suits more experienced investors. 

The New Zealand Stock Exchange 

At time of writing, the New Zealand Stock Exchange (NZX) market is capitalised at over NZ$70 billion with just over 250 listed companies and a daily volume of trades of about NZ$120 million. The New Zealand share market is less than 1% of the value of the world stock market. Many New Zealand investors also trade in Australian shares, as the Australian market is around 20 times bigger. 

There are three primary securities markets within the NZX:  

• The NZSX, or main board
  Around 170 of New Zealand's most established companies listed, considered the primary market. The top 10 listed companies tend to pretty much dominate trading, but there are many interesting medium-sized companies listed.
• The NZDX, or debt market
  Offering corporate and government bonds and fixed income securities. Around 50 companies listed.
• The NZAX, or alternative market
  Comprises just under 30 small to medium-sized non-standard companies.

Key indices include:

• The NZSX 50 - the top 50 companies listed on the NZSX (by market capitalisation).
  
• The NZSX 15 - the top 15 companies listed on the NZSX. The index is reviewed every 6 months, and the weighting of any security in the index is capped at 30%.
• The NZSX 50 Portfolio - same top 50 companies as the NZSX 50, the weight of any one security is limited to 5% of the index market capitalisation.
• There are also a Science and Technology index, an NZX 10 index, Mid Cap and Small Cap indices, and both NZX and NZAX All indices.

For more information on the NZ share market, see www.nzx.com - the official page of the NZ stock exchange.

There are over 30 share broking firms authorised to trade, which include some large international firms, the main NZ banks, large independent stockbrokers and a number of small and medium sized firms. There are many more companies that give advice but will use an authorised firm to carry out trades. 

The key to direct investment in New Zealand shares (as to with any investment) is thorough research - and gaining an understanding of the risks involved.

This article was supplied by Broadbase International Ltd (www.broadbaseinternational.com). Information contained in this article is of a general nature and is not intended as a substitute for professional advice based on your individual circumstances. Disclosure statements are available on request and free of charge.