Trading and settlement of all activity has performed well, including under the pressure of heavy trading volumes, NZX chief executive Mark Peterson said.
Apart from equities the main markets used by farmers are the Fonterra Shareholders Market and the Dairy Derivatives market for futures and options contracts.
After an extended period of stability at $4 Fonterra supply shares and their matching Shareholders Fund units have bounced around in a 25c band below that level over the past three months.
At any time the share/unit price loss was a maximum of 6%, attributable to the covid-19 virus disruption.
The relatively mild reaction has probably been because of Fonterra’s financial recovery and incident-free exporting.
Fonterra’s share compliance date has been extended from December 1 to April 20 as a response to its lower share value and more stringent bank loan requirements. The application period for cease notifications ended on February 29.
The S&P NZX primary sector equity index has dropped about 20% since the beginning of the year and its present level around 9000 is where it was in September 2017.
The parent NZX50 index is down 25%, giving some indication primary sector companies are faring better in the covid-19 bear market.
The primary index includes all NZ listed companies involved in agriculture, horticulture, viticulture, aquaculture and forestry.
Market leader by capitalisation, A2 Milk Company, has remained above $15 a share since January as demand in China for infant formula remained strong.
At $16.30 at the time of writing it was 15% up on March 2019.
By contrast, major wine company Delegats dropped 40% from $12 at the start of the year to $7 today though most of its sales are made in export markets such as Britain, Australia and the United States.
It is down 30% on a year ago.
Fisheries leader Sanford’s share price has dropped the NZX50 average of 25%, from $8 to $6, some 8% lower than one year ago.
At about $3.50 a share horticultural producer and processor Seeka is also down 25% over the past three months and the past 12 months.
Rural services provider PGG Wrightson dropped 30% from January’s level of $2.50 to $1.75 now.
Its latest market announcement confirmated a scheduled interim dividend of 9c will be paid on April 3 but the board’s guidance of earnings about $30 million for the full year will be reviewed.
NZX analytics head Julia Jones said continued use of the markets shows farmers are habitual traders and agribusiness companies have been less hurt by covid-19 than other sectors.
“Global Dairy Trade prices haven’t dropped as much as feared,” she said.
Heightened world trade risks had renewed interest in dairy derivatives, NZX reported.
In the first quarter of 2020 NZ milk price futures and options trades were 86% higher than in Q1 2019.
In the bigger dairy supply chain, ingredients (whole milk powder, skim milk powder, butter, anhydrous milk fat) futures and options year-to-date trades were 12% higher.
The futures market for milk price is at $7.22 for this season and $6.35 for next season.
