Like many inventory exchanges globally, the New Zealand inventory alternate continues to emerge from the COVID-19 pandemic-induced trough of 2020, though volatility stays because the pandemic drags on and as markets face new challenges equivalent to the continued geopolitical tensions in Europe.
NZX had a lackluster 12 months in 2021
The NZX 50 ended 2021 flat at 13,033.77, marginally down from 13,091.64 on the finish of 2020 after 9 consecutive years of progress. The capital market’s lackluster efficiency got here because the New Zealand financial system grew at a weaker-than-expected tempo in 2021.
Information from the NZX (NZE:NZX) confirmed that the full worth of shares traded final 12 months fell 2.4% 12 months over 12 months to NZ$52.4 billion, considerably weaker than the 41.8% bounce in 2020.
Nonetheless enticing for IPOs
Nonetheless, the NZX remained interesting for preliminary public choices and secondary listings in 2021, with the worth of recent capital listed and raised rising 12.1% to $19.8 billion. The bourse hosted the IPOs of 9 new corporations final 12 months. In 2020, complete capital raised from IPOs fell 5.5% to NZ$17.6 billion, with solely eight new additions to the NZX.
Final 12 months, native meal package house supply service platform My Meals Bag (NZE:MFB) launched the largest IPO within the nation in seven years, elevating NZ$342 million and valuing the corporate at near NZ$450 million.
NZX, in its annual report, attributed the rise within the variety of first-time listers final 12 months to some adjustments that it carried out together with lowering the complexity and prices of IPO functions.
This 12 months, New Zealand’s IPO pipeline just isn’t wanting as rosy as final 12 months with no main rumors of a possible itemizing.
Globally, the lingering pandemic and geopolitical shocks are anticipated to weigh on investor urge for food for brand spanking new listings, in keeping with PwC’s 2022 outlook. Nonetheless, the accounting agency famous that “optimism stays excessive that vaccines and different mitigation methods can forestall widespread lockdowns, retaining fairness markets regular and sustaining the atmosphere many potential corporations search when going public.”
Larger volatility looms for 2022
Buyers should buckle up for a wild experience this 12 months as markets emerge from post-pandemic restoration and as central banks tighten their financial insurance policies in response to larger inflation. At house, the Reserve Financial institution of New Zealand expects the official money price to climb 2.5% within the subsequent 12 months earlier than peaking at 3.25% at 2023-end.
Greatest shares for NZX’s progress
Regardless of market challenges, the NZX is poised to learn from the robust efficiency of some high-performing shares with stellar steadiness sheets, excessive profitability, and powerful free money stream technology.
SKY Community Tv (NZE:SKT) is among the many finest performers on the NZX. The inventory bounced strongly within the first quarter of 2022, surging 56% over the previous 12 months as of Wednesday. The published firm recorded better-than-expected earnings within the six months ended Dec. 31, pushed by robust buyer progress after the corporate supplied promotions throughout COVID-19 lockdowns.
Metal Tube (NZSE:STU) is one other progress driver for the NZX as the corporate cashed in on larger metal costs regardless of provide chain pressures, with its latest half-year revenue tripling.
EBOS Group (NZE:EBO), whose shares surged to an all-time excessive in January, can also be off to a great 12 months because the healthcare firm posted one other document first half lately owing to its diversified portfolio of healthcare and animal care merchandise.
The NZX can also see a lift from different high-performing shares together with gasoline distributor Z Power (NZE:ZEL), logistics agency Mainfreight (NZE:MFT), utilities agency Contact Power (NZE:CEN) and renewable power firm Infratil (NZE:IFT).
This text was submitted by an exterior contributor and will not symbolize the views and opinions of Benzinga.
