Compare Brokers in New Zealand

Looking for brokers in new zealand? We have compared 2 broker accounts (out of 147) that are suitable for you below.

We found 2 broker accounts (out of 147) that are suitable for New Zealand.

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Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data.

The Ultimate Guide to

The New Zealand Financial Market

Anyone looking to trade on the New Zealand financial market can make use of the many available online brokers and trading indices. Brokers operating in New Zealand must also be authorised and submit to regulation by New Zealand’s official financial regulatory body called the Financial Markets Authority (FMA).

The FMA started operation in 2011 after the Financial Markets Bill was passed by the New Zealand parliament as a response to the global financial crisis that caused many traders in New Zealand to suffer losses. As a member of the International Organisation of Securities Commissions (IOSCO), the FMA was designed to operate under and enforce stricter rules and regulations for firms providing financial services and access to the financial markets in New Zealand.

For equity traders, the major New Zealand stock board is the NZX Market which lists more than 200 companies. These include most of New Zealand’s well-established businesses, as well as some overseas companies that together form the basis of New Zealand’s economy. The NZSX is the primary stock index consisting of the largest 50 firms on the NZX Market by market cap.

Those who plan on trading the New Zealand Dollar (NZD) should be aware a variety of factors that traditionally influence the value of that currency. For example, the price of oil and other relevant commodities, natural events like major earthquakes, the local housing market, trade tariffs and agreements, and risk aversion can all affect the NZD/USD exchange rate.

Trading in New Zealand

Many online brokers provide a variety of accounts for people looking to trade in the New Zealand financial market. Some of the main types of trading that takes place through online brokers are:

Forex Trading: The forex market is the largest and most liquid financial market in the world, with forex brokers seeing a daily turnover of $5.1 trillion per day in April 2016. The New Zealand dollar was ranked 10th among the most actively traded currencies by the BIS in April 2016, comprising around 2.1 percent of daily forex market turnover.

CFD Trading:  This involves operating in contracts for difference (CFDs) consisting of derivative financial instruments that have their value determined by that of an underlying asset, which can be a currency pair, stock, stock index, commodity or other financial instrument. Read more about finding the best CFD broker.

Demo accounts: Funded with virtual money, these accounts can be used to practice trading, test a strategy or check out a broker’s services and platform. Find out more on opening demo accounts here.

Islamic accounts: These are suitable for traders who wish to trade in an account that conforms to Sharia law. Find out more on trading with an Islamic account.

Opportunities of Trading in New Zealand

New Zealand was ranked the top country when it comes to the ease of doing business by the World Bank, so it offers a very favourable regulatory environment for companies and industry to operate in. The World Bank also reports on the country’s variety of new business opportunities, as well as the availability of financing from local banks.

Furthermore, some significant regulatory changes on the horizon may affect how people trade in New Zealand. The Financial Services Legislation Amendment Bill of 2016 aims to upgrade the requirements of the Financial Advisers Act of 2008. Once implemented by the New Zealand parliament, these changes will introduce a new regulatory system and code of conduct for providing financial advice.

Challenges of Trading in New Zealand

Some of the biggest challenges to operating in any financial market involve learning its unique characteristics and market-moving factors. In the case of New Zealand, the value of local stocks and its currency can be notably affected by geological and climate factors, as well as by overall risk aversion, thereby potentially increasing the risk of unanticipated market moves.

Prominent examples include the major Canterbury earthquake that prompted $40 billion in reconstruction activity, as well as the decline seen in agricultural spending and production associated with a recent drought.

Summary

For those new to trading in New Zealand, the FMA provides educational materials they can use to make better decisions about how to operate more securely and prudently in the financial markets.

In addition, by choosing to operate through an FMA regulated broker, a trader can have confidence that the broker’s transactions will be overseen by one of the world’s strictest financial regulators.

Related Pages

Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data.