NZ 10 Year Government Stock

What are NZ 10 Year Government Stocks?

Trading in 10 year New Zealand government stock futures is done ‘on market’ through the electronic platform ASX Trade24 and ‘off market’ through the block trade facility.

Features:

  • Cash Settled
  • Variable Tick Value on the basis of their yield with the futures price quoted as 100 minus the yield to maturity expressed in per cent per annum

Uses of NZ 10 Year Government Stock

The 10 Year New Zealand government stock futures are approved for trading by:

  • US Commodities Futures Trading Commission (CFTC)
  • UK Financial Services Authority (FSA)
  • Monetary Authority of Singapore (MAS) and
  • Hong Kong Securities and Futures Commission (SFC Hong Kong)

Risks of NZ 10 Year Government Stock

As with all government backed securities, the risk with NZ 10 Year Government Stock lies in the default risk of the New Zealand government. Fitch’s January 2016 rating of New Zealand’s domestic currency is AA+ with a stable outlook. If traded outright the risks are simply that the position will move against the expected direction of the trader.

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