New Zealand Stock Exchange (NZX): Meaning, How It Works, Products

What Is the New Zealand Stock Exchange (NZX)?

The New Zealand Stock Exchange (NZX)—also known as New Zealand's Exchange—is the national stock exchange for New Zealand. The New Zealand Stock Exchange (NZX), based in Wellington, consists of the NZX Main Board, the NZX Debt Market, the NZX Dairy Derivatives, the NZX Equity Derivatives, and the Fonterra Shareholders' Market.

The purpose of the NZX is to provide a marketplace where the exchange's listed equities and funds can be traded. The NZX provides a platform for the buying and selling of liquid investments, offering investors access to market information and real-time stock quotes.

Understanding the New Zealand Stock Exchange (NZX)

The NZX originated in New Zealand's 1870s gold rush when the country's four biggest gold mines served as financial centers and each had its own exchange. In 1915, the exchanges began operating under the newly formed Stock Exchange Association of New Zealand. In 1983, the New Zealand Stock Exchange was created and brokers' status within regional exchanges was widened to include national member status. The 1987 stock market crash prompted changes aimed at improving governance, revising the listing rules, and implementing more stringent broker educational requirements.

In 2002, in a move to begin changing the governance and ownership structure of the exchange, shareholders elected a board of directors and a chief executive. In 2003, the New Zealand Stock Exchange formally changed its name to the New Zealand Exchange Limited, trading as NZX. The company demutualized and listed on its own exchange. Shareholders have ownership and control of the NZX, while brokers act as market participants.

New Zealand Stock Exchange (NZX) Products

The NZX offers investors access to a variety of investment products and tools.

Exchange Traded Funds (ETFs)

Smartshares is a member of the NZX Group that issues exchange traded funds (ETFs) listed on the NZX Main Board. ETFs enable investors to create a diversified portfolio that includes a range of securities, such as government bonds and listed companies.

Investment and Insurance

The SuperLife program offers businesses and individuals various savings, investment, and insurance products. They provide superannuation plans that are pension programs set up by companies to benefit their employees. KiwiSaver is a voluntary savings program that helps New Zealanders save for retirement.

Wealth Management

The NZX owns and operates its own wealth management business called NZX Wealth Technologies. The company offers both large investment advising firms and small boutiques the tools and platform needed to manage and trade their clients' investment assets.

Dairy Research

Over the decades, the dairy sector has provided New Zealand with many employment opportunities and is an important contributor to the nation's gross domestic product (GDP). The NZX provides investors access to dairy reports, data, and insights.

Investment Research

NZX Data Products produces investment research and information across the equities, agriculture, and energy markets. NZX has a company research center that enables private investors, financial planners, and fund managers access to current and historical analysis of New Zealand companies.

Investor Education

NZX hosts a virtual trading platform that enables new investors to learn about investing concepts and participate in virtual trading sessions. Investors can paper trade stocks via simulated trades without risking money.

Special Considerations

The NZX Main Board and Debt Market are home to a variety of businesses looking to benefit from the advantages gained from being listed on a stock exchange. These companies include managed funds, cooperatives, and debt and equity issuers. The NZX provides a platform for companies to attract the capital they need to accomplish a variety of things, such as increase growth, pay down existing debt, refinance debt, or fund special projects. In 2019, the NZX helped companies raise NZ$8.5 billion in total equity and NZ$6.3 billion in total debt.