Originally Posted by
Fiordland Moose
Good question. Once upon a time I had an Iress & Bloomberg terminal where you could see what brokers the volume was coming from (via insto or retail) but no longer. But we can infer it by looking at the register.
HLG as retail as they come. Tim Glasson the only substantial shareholder with a 20% stake and no SSH notice from him so he is off the table. There are no other substantial shareholders so unless a pre-existing large but non-substantial shareholder was buying (unlikely) we shouldn't expect to see any SSH notices. We haven't seen any mgmt. or director notices either (what a look that would be!)
The ACC holds 3.38%, the Hickman's at 1.79%, and then a slew of broker retail nominee co's, plus a few HNW holding vehicles. Tracing through some of the nominees the only insto we can see is Dimensional Fund Advisers out of the USA who hold less than 1%.
I think we can safely assume all the broker nominee co's hold on behalf of retail (whether on full authority, discretionary or otherwise). HLG has got a really long tail of small and medium retail holders holding in their own right.
In the year leading up to the announcement of HLG's inclusion it had average daily volume of ~15.3k shares per day. Post that day I estimate an incremental ~2.7m shares were purchased, with 1.5m for the index inclusion and 1.2m speculating on gains from the inclusion. To put it in proportion, the level of excess volume equated to 4.5% of outstanding shares.
We'll never know exactly where the volume for this came from but I'd wager price signals sent from the rising buy demand were enough to elicit sell downs from individual holders. Retail headwinds are high and the whole sector (including best of breeds in Australia) are being negatively downrated with their own SP's falling and holders would be reactive to rising prices in that environment.
There is also good broker led retail custodianship of HLG shares with all the usual broker custodian names held in the top 20. The broker would have discretion in a good deal of these underlying interests and I also reckon they sold some down to meet demand.
I thought one broker was uncharacteristically harsh of HLG's inclusion to the NZX50: "a sad day with the delisting of growth stock Pushpay which will contribute to the ongoing shrinking of the NZ Stock Exchange. Equally as sad is the inclusion of trusty old Hallenstein Glasson's into the NZX50 as its replacement - illustrating the extraordinary lack of depth in the NZ stock market." I can imagine how they would direct their discretionary positions.
There may have been some spec buying in the lead up to the NZX50 announcement after people initially read the Forbar research but trading patterns from the date of that report to when the stock went up suggest if there was any it was very 2 bit in nature. So the demand wasn't satisfied by the incremental purchases after reading Forbar research, but existing holders making incremental spec purchases very well may have sold down into the inclusion (but still likely small beans).
What's more of interest is what happens to the 1.2m of shares that look to have been purchased with speculative intent. By all accounts the index pop looks to be disappointing and the SP has been steadily trending down post inclusion. These sort of buyers don't scream committed long term holder (of whom they displaced) and with the SP now in steady decline suggest a potential large uncommitted overhang wanting to get out if gains can't be secured. But with normal average daily volume of ~15k, that should be interesting, as its a long backlog.
Index Pop 101 in action.
Funny how when all the virtues of the NZX50 inclusion were being actively promoted, the full dynamics of an index pop were left out. Either by ignorance or design.