New Zealand ranked third behind Hong Kong and Singapore in overall economic freedom by The Heritage Foundation with an overall score of 84.4 out of 100 in 2019. New Zealand’s primary stock exchange is known as New Zealand Exchange Limited (NZX), and it provides a trading venue for the local equity, derivatives, energy and debt markets.
Its currency is the New Zealand dollar (NZD) or “kiwi,” which remains among the most actively traded worldwide. It was ranked the 10th currency in terms of global OTC turnover by the Bank for International Settlements (BIS) in 2016.
If you’re based in New Zealand and want to trade in the stock market, you can find several stockbrokers that could meet your needs. Not all brokerages are created equal, so make sure to carefully consider your needs before you open an account.
Quick Look: The Best Stock Brokers in New Zealand
- Best Overall: Interactive Brokers – Learn More
- Macquarie Group Limited
- First NZ Capital Group
- Forsyth Barr
- Somerset Smith Partners
What You’ll Need to Know Before You Start Trading
The stock market and the rest of the financial sector in New Zealand have the oversight and regulation of the Financial Markets Authority (FMA), which was started after the passing of the Financial Markets Bill by New Zealand’s Parliament in 2011. The regulatory agency is a member of the International Organization of Securities Commissions (IOSCO).
In order to trade shares in New Zealand, you must have a common shareholder number (CSN) assigned to you. This number is common to all New Zealand share registries for listed securities and identifies your stock holding as separate from all others.
In addition to the CSN, New Zealand shareholders require a faster identification number (FIN), also known as an authorization code. The FIN is associated with your CSN and consists of a four-digit number issued by share registries and it is required to sell New Zealand stock holdings. If you don’t have a CSN or FIN, your broker can obtain one for you when you open your account.
One of the most important elements regarding trading in the New Zealand stock market or any other capital market in New Zealand consists of how climate and geological factors can significantly influence local stock prices and the valuation of the kiwi. For example, the 2010 Canterbury earthquake, which caused approximately $40 billion in damages, and the drought declared in early 2018 both affected the country’s economy significantly. They provide two instances that illustrate how local conditions can notably influence stock and commodity prices.
What to Look for in an Account
Consider several elements before you decide on a stockbroker to trade the New Zealand stock market. Most importantly, you should have a clear idea of your needs for trading and/or investing. Here are a few factors you might consider:
Broker FMA Regulation
The security of your funds comprises one of the most important considerations when you choose a stockbroker. New Zealand’s FMA oversees operations and regulates all stockbrokers in the country.
In order to trade efficiently on the NZX, your broker would ideally need to be a member of the NZX exchange to be able to execute orders for your account. Members generally have a representative present at the exchange to oversee customer orders.
Website and Trading Platform
How you enter orders and receive confirmations depends on whether the broker has an online presence and offers an electronic and/or web-based trading platform. Alternatively, many stock brokers can still take orders and confirm fills over the phone.
Brokerage Fees and Costs
The commission you pay could make a big difference if you trade frequently. If you day trade, scalp or use other short term trading strategies, you’ll likely pay more. Nevertheless, if you trade infrequently, higher commissions won’t affect you as much.
In addition to filling stock orders on the NZX, some regional brokers offer other services. These range from an execution service in commodities, forex and ETF trading to investment management and investment banking.
The Best Stock Brokers in New Zealand
After reviewing stock brokerage firms in New Zealand, five brokers were singled out as the best. All of the brokers mentioned below execute trades on the NZX, in addition to offering other brokerage and related services as well as extensive resources for clients.
With respect to markets, this international broker gives you access to trade on more than 120 world exchanges with its Integrated Investment Account.
IBKR allows clients to trade ETFs, futures, options, warrants, precious metals, forex, bonds, funds
IB’s trading platforms include an intuitive Client Portal for less experienced traders, a professional Trader Workstation (TWS) platform filled with useful features that might appeal to more sophisticated traders, a WebTrader web-based platform and mobile applications for Android and iOS devices.
rThe broker also has a hands-free addon called IBot that is available for the TWS desktop version, IBKR mobile
The minimum deposit to open an IB account is $10,000. Customer service is available 24/6 and can be accessed through email, live chat
Macquarie Group Limited
Founded in 1969 and with offices around the world, Australian-based Macquarie meets all the New Zealand regulatory requirements and could be considered the best international broker with a presence in New Zealand.
In addition to brokerage services, the company offers asset management services, a corporate and asset finance group, banking and financial services and commodities trading and other global markets.
Macquarie offers trading in a variety of tradable assets in addition to trading stocks on the NZX and ASX. Other offerings include equity derivatives with a focus on Asian, Australian, Japanese and South African equity derivatives.
The Macquarie Electronic Execution platform’s trading software enables clients to access more than 100 liquidity venues in 50 countries through its intuitive global interface.
The platform provides 24/6 trading coverage beginning with the New Zealand pre-market.
It closes after the U.S. close on Friday afternoon. In addition to equities and derivatives, Macquarie allows clients to trade fixed income securities, currencies, currency options, forwards, swaps and structured products, as well as commodities and commodity futures in agriculture, energy and metals products.
First NZ Capital Group (FNZC)
Also known as Direct Broking, First NZ Capital Group offers share trading on the NZX and the Australian Stock Exchange (ASX). The broker also offers
You can trade shares directly through its trading platform or over the phone. Other offerings by FNZC include trading in the Unlisted and NXT markets, New Zealand and Australian bonds (including New Zealand government bonds).
It also includes local authority stock, corporate bonds, bank term deposits and bonds, debentures, perpetual instruments
FNZC meets all the regulatory requirements of the FMA and is a member of the NZX.
You can also access
With 21 regional offices throughout New Zealand, Forsyth Barr has served the New Zealand investment community for more than 80 years. The company has been confirmed by the FMA as a qualifying financial entity and is a New Zealand Exchange firm (NZX) and accredited market participant. The company provides a full range of financial services for individuals, corporations and institutional clients.
Forsyth Barr prides itself on its research offerings and its leading analyst team, as well as global affiliations that ensure worldwide coverage of all major world capital markets. In addition, Forsyth Barr provides a complete range of investment banking services and has a good reputation for raising money and debt capital for New Zealand’s public entities.
The company’s portfolio management and monitoring services cover over $6 billion in client investments, which include investment administration and reporting services. The broker also offers online and mobile trading platforms and forex trading.
Somerset Smith Partners
\Founded in 1934, Somerset Smith provides investment advisory services, financial planning
The company is one of the oldest brokerages in New Zealand and provides research from various sources on all major New Zealand and Australian listed companies, as well as on many major international companies. The firm’s brokerage service can extend to a full investment advisory service.
Other offerings from Somerset Smith include access to new listings from allocations the firm receives, domestic and international share markets, quality research and non-listed investments such as managed funds, property investments, funds and interest-bearing securities.
In addition to its wealth management services, Somerset Smith offers succession planning and trusts. The company can be contacted during New Zealand business hours through a telephone number or through a form on its website where you input your name, email address
Get Ready to Trade
Once you’ve decided on the New Zealand stockbroker of your choice, you can begin your trading experience. Strongly consider either preparing a trading plan or following someone else’s if you can’t come up with your own. Keep in mind that the more you know about the markets that you plan to trade, the more likely you are to be successful.