New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>NZX</h2>
Interim result expectations &amp; Tracking Brief
<ul>
<li>We expect a strong 1H20 result released on 13th August 2020 driven by the Secondary Markets and Data &amp; Insights divisions.</li>
<li>We believe there to be upside risk to our H1 forecasts.</li>
<li>July Operating stats show a positive start to the second half.</li>
<li>Despite lower market volatility for the month July cash traded value was +43% on the previous year.</li>
<li>4 new Smartshares ETFs were added to FUM during the month taking the total to 35 funds.</li>
<li>Reiterate OUTPERFORM rating</li>
</ul>
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.1&amp;permmsgid=msg-f:1674138824334708408&amp;th=173bbc6409290eb8&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ-5gfe7LE91nclk4fIQGrSklL_Wby12hmwCnrASgP15kXRcopHzZjLmV5oreZ_PPK7QdahIh-gP0aB0irJFANim59EOC36t4WMc94srv64CiZ7LOWNN5vZEwnU&amp;disp=emb" width="311" height="162" class="editor-image img-responsive" data-image-whitelisted=""></figure>
Interim result expectations
<ul>
<li>We expect interim results to show continued growth across the five divisions with the standout performer the Secondary Markets division, which benefitted from underlying growth in addition to a period of super-trading in March and April.&nbsp;</li>
<li>Issuer Relationships has benefited from a number of secondary equity raises despite the COVID-19 impact to the IPO market.</li>
<li>Data and Insights has seen significant increase in the number of average terminals and licences recorded across the half highlighting the increased interest and participation in New Zealand capital markets.</li>
<li>Funds Under Management continues to steadily grow despite exposure to international equity markets with four new ETFs added to the portfolio in July – we expect to see more added across H2.</li>
<li>Wealth Technologies has increased Funds Under Administration up to NZ$3.1bn for the half, partially due to a contract win with a new (unnamed client).</li>
</ul>
Interim forecasts:
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.5&amp;permmsgid=msg-f:1674138824334708408&amp;th=173bbc6409290eb8&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8KtKB7ALxs-bzZ63MFYgToGkR2cHSPUceYc3H5bunMKj636UoxGT0XS-uQjrXiPgK2jF-pdula0mKXyfd_8VCdSjLrmYCM98UxpApTSdK6ELNCOAu47r80oVA&amp;disp=emb" width="298" height="122" class="editor-image img-responsive" data-image-whitelisted=""></figure>
Divisional breakdown:
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.6&amp;permmsgid=msg-f:1674138824334708408&amp;th=173bbc6409290eb8&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ9SlZsoJ9TvSfOl7n5lY4CacLjklL-3Db0LJ_NTtMZyKADj8ADVXxldtvVyncBk0gMZzVhf9tpU5VNOGyg-UiffhcyPoBusPpU9yQ2WItC7C9SGX_KfAL_LJ9s&amp;disp=emb" width="297" height="139" class="editor-image img-responsive" data-image-whitelisted=""></figure>
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.7&amp;permmsgid=msg-f:1674138824334708408&amp;th=173bbc6409290eb8&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8RAoSEAP7y7R4LbVWVSOWSToqCJEV6mXab4XFazoi-3-PxXTdOkOCmtNjkkQv-S5Evd61cO2N7Rh26B_k5jAQ7QOeDwRHnpGecddMJQEmigfF6V3pCIJ4YbTg&amp;disp=emb" class="editor-image img-responsive"></figure>
<h3>Monthly tracking Brief:</h3>
Issuer Relationships
<ul>
<li>We expect Secondary capital raises to slow throughout the remainder of the year with July showing NZ$500m raised.</li>
<li>We are encouraged to see a reverse listing during the month of NZ$54m.</li>
<li>We expect total capital raised to comfortably exceed NZX’s target of NZ$9.5bn on aggregate for the year.</li>
</ul>
FY20 Issuer Relationships Tracking Progress:
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.8&amp;permmsgid=msg-f:1674138824334708408&amp;th=173bbc6409290eb8&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8w5BnJgRfyyo_AgSd9x2UgetGpwkpdpaQMpwnJN5FzjXL48u4cLTjiZiwZZz14SMzPiXCeQRKsUUOREbqNjdd9M5w_OVDVYoToXzavmzbWpHskYQI0ZvLfKuk&amp;disp=emb" class="editor-image img-responsive"></figure>
Secondary Markets
<ul>
<li>NZX continues to benefit from both retail participation and underlying growth of cash value traded.</li>
<li>Despite a slowdown of traded volume and value since the peak of super trading in March and April, cash value traded for the month was +43% on July 2019.</li>
</ul>
Total cash value traded Jan-19 to July-20
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.3&amp;permmsgid=msg-f:1674138824334708408&amp;th=173bbc6409290eb8&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ92LrleiOOe9iP9m98cnL4oNNbedclGLh9nzoDOPeGq6-YdlxF7fT1MwL_W2kodSz370mnUnCFGayavqvVpJ6a3Iypst5qmywQh0_j_cYKWButymzKNDRdDheM&amp;disp=emb" width="479" height="285" class="editor-image img-responsive" data-image-whitelisted=""></figure>
FY20 Secondary Markets Tracking Progress FY:
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.9&amp;permmsgid=msg-f:1674138824334708408&amp;th=173bbc6409290eb8&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8YyOVyDTUEd5hJ7l_0aW9l4ocKdU94ifDT6CVeFB6yRWO-KOKDeo7YIFBQIqWFCFssegFszfggybljJBM9gb8W8cyPABrcxkLNpJTnhN2N0I97foxCFlpzzNY&amp;disp=emb" width="603" height="289" class="editor-image img-responsive" data-image-whitelisted=""></figure>
Data and Insights
<ul>
<li>Retail terminals in the Data and Insights division continue to hold up well with total terminals and licences up +24% from July 2019.</li>
</ul>
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.4&amp;permmsgid=msg-f:1674138824334708408&amp;th=173bbc6409290eb8&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ-URPFcO97cQdaYYAXxQB6YCOKKZ4YExHLdWDI8Iw_OhecXGF7cljEw9DFQ0MqgWC64BKC5Rp8mB0UNaBJOLxq4X4FbVOuklIZluesG4Hx3ymSPOanu-XIcwQM&amp;disp=emb" width="479" height="283" class="editor-image img-responsive" data-image-whitelisted=""></figure>
Funds Management
<ul>
<li>Both Funds Under Management and the Wealth Technologies division grew in the month of July.</li>
<li>Four new Smartshares ETFs were added to the Funds Under Management to take the total to 35 funds.</li>
<li>We also expect additional new funds to be added during the current year.</li>
<li>We expect net cash inflows across the portfolio to increase with additional funds added.</li>
<li>The four new Funds added are:</li>
</ul>
&nbsp; &nbsp; &nbsp; S&amp;P/NZX 50 ETF &nbsp; &nbsp; &nbsp; S&amp;P/ASX 200 ETF &nbsp; &nbsp; &nbsp; Total World (NZD Hedged) ETF &nbsp; &nbsp; &nbsp; S&amp;P/NZX NZ Government Bond ETF&nbsp;
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.10&amp;permmsgid=msg-f:1674138824334708408&amp;th=173bbc6409290eb8&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ9f0dYb0mVZYhc0YVE5f-HzDJc8BAv9p9zno3Pvxi-F7XgB3VEWcUwHNobsSS-vLquud2AtRVuietv8GA-r6g3QuSuSZQL6UXjFxTj-9d1ndUhkvUMq_2nddQo&amp;disp=emb" width="479" height="288" class="editor-image img-responsive" data-image-whitelisted=""></figure>
Jamie Foulkes Analyst, Equities <a href="https://www.forsythbarr.co.nz/" target="_blank" rel="noopener">Forsyth Barr Limited&nbsp;</a>
P:+64 4 914 2217 |TF:0800 367 227 Level 22, NTT Tower, 157 Lambton Quay, Wellington

NZX
Interim result expectations &amp; Tracking Brief

We expect a strong 1H20 result released on 13th August 2020 driven by the Secondary Markets and Data &amp; Insights divisions.
We believe there to be upside risk to our H1 forecasts.
July Operating stats show a positive start to the second half.
Despite lower market volatility for the month July cash traded value was +43% on the previous year.
4 new Smartshares ETFs were added to FUM during the month taking the total to 35 funds.
Reiterate OUTPERFORM rating


Interim result expectations

We expect interim results to show continued growth across the five divisions with the standout performer the Secondary Markets division, which benefitted from underlying growth in addition to a period of super-trading in March and April.&nbsp;
Issuer Relationships has benefited from a number of secondary equity raises despite the COVID-19 impact to the IPO market.
Data and Insights has seen significant increase in the number of average terminals and licences recorded across the half highlighting the increased interest and participation in New Zealand capital markets.
Funds Under Management continues to steadily grow despite exposure to international equity markets with four new ETFs added to the portfolio in July – we expect to see more added across H2.
Wealth Technologies has increased Funds Under Administration up to NZ$3.1bn for the half, partially due to a contract win with a new (unnamed client).

Interim forecasts:

Divisional breakdown:


Monthly tracking Brief:
Issuer Relationships

We expect Secondary capital raises to slow throughout the remainder of the year with July showing NZ$500m raised.
We are encouraged to see a reverse listing during the month of NZ$54m.
We expect total capital raised to comfortably exceed NZX’s target of NZ$9.5bn on aggregate for the year.

FY20 Issuer Relationships Tracking Progress:

Secondary Markets

NZX continues to benefit from both retail participation and underlying growth of cash value traded.
Despite a slowdown of traded volume and value since the peak of super trading in March and April, cash value traded for the month was +43% on July 2019.

Total cash value traded Jan-19 to July-20

FY20 Secondary Markets Tracking Progress FY:

Data and Insights

Retail terminals in the Data and Insights division continue to hold up well with total terminals and licences up +24% from July 2019.


Funds Management

Both Funds Under Management and the Wealth Technologies division grew in the month of July.
Four new Smartshares ETFs were added to the Funds Under Management to take the total to 35 funds.
We also expect additional new funds to be added during the current year.
We expect net cash inflows across the portfolio to increase with additional funds added.
The four new Funds added are:

&nbsp; &nbsp; &nbsp; S&amp;P/NZX 50 ETF &nbsp; &nbsp; &nbsp; S&amp;P/ASX 200 ETF &nbsp; &nbsp; &nbsp; Total World (NZD Hedged) ETF &nbsp; &nbsp; &nbsp; S&amp;P/NZX NZ Government Bond ETF&nbsp;

Jamie Foulkes Analyst, Equities Forsyth Barr Limited&nbsp;
P:+64 4 914 2217 |TF:0800 367 227 Level 22, NTT Tower, 157 Lambton Quay, Wellington

NZX: Interim Result Expectations & Tracking Brief