New Zealand Equity Trading Resumes After Fault Halts MarketAdam Haigh
Equities trading in New Zealand resumed after a technical fault caused NZX Ltd., operator of the country’s stock exchange, to halt trading for two hours.
An unspecified connectivity issue forced the exchange to halt trading from 12:51 p.m. until 3 p.m. in Wellington, NZX spokeswoman Kate McLaughlin said by phone today. The exchange operator decided to suspend trading while it investigated the issue, citing “the interests of running fair, orderly and transparent markets.”
New Zealand is the third-smallest equity market among 16 major countries in the Asia-Pacific region tracked by Bloomberg News, ranking below Pakistan and the Philippines. The nation is headed for its busiest year for initial public offerings in a decade after the sale of about 49 percent of state-owned Mighty River Power Ltd. in May as Prime Minister John Key pledged to raise between NZ$5 billion ($3.9 billion) and NZ$7 billion selling shares in state-owned companies.
“This is the first time in a long while that the market has had to shut on the back of an outage,” James Lee, Auckland-based head of institutional equities at First NZ Capital Ltd., a brokerage and wealth-management firm, said in a telephone interview. “The market just re-adjusted when it re-opened. There was nothing we could do, really.”
Tim Bennett, chief executive officer of NZX, told Bloomberg TV June 28 that companies are currently more receptive to the possibility of listing on the country’s exchange.
The government plans to offer shares in Meridian Energy later this year. Infratil Ltd. appointed advisers for a potential IPO of fuel retailer Z Energy, and dairy company Synlait Milk Ltd. last week said it will offer new and existing shares to the public and seek a listing.
“The cause of this operational issue will be fully investigated, the findings of which will be reported back to the Financial Markets Authority and market participants,” McLaughlin said in an e-mailed statement.
NZX shares fell 1.5 percent to NZ$1.32. The stock gained 11 percent this year through the end of June, compared with a 9.2 percent advance on the benchmark NZX 50 Index. The index fell 0.5 percent to close at 4,418.05 in Wellington.
“It does destroy the whole idea of a perfect market,” Evan Lucas, a Melbourne-based market strategist at IG Markets Ltd., a provider of trading services for equities, currencies and commodities, said in a telephone interview.