WHAT
IS THE NZSE40?
The NZSE40 is an index which measures the overall state of the New
Zealand share market. It does this by effectively giving a value for
the 40 largest companies listed on the New Zealand Stock Exchange
(NZSE40 stands for New Zealand Stock Exchange Top 40 Companies).
The
index allows you to see at a glance what the overall movement in
the market has been on any given day (eg, 27 shares rise, 4 stay
the same and 9 fall). The index will also automatically adjust for
a share price movement in a large company versus a small company.
For example, a 3c rise in NZ's biggest company Telecom, may significantly
outweigh a 40c fall in the share price of one of the smaller companies
such as Fernz.
Strictly
speaking, there are two NZSE40 indexes. These are the NZSE40 Capital
Index (most commonly quoted) which measures capital gains, and the
NZSE40 Gross which measures capital gains plus accumulated dividends.
To
summarise, it is a handy little number which captures a lot of useful
information on the overall state of the New Zealand share market.
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