Institutional investors

Issuer sponsored shares on the ASX have a securityholder reference number (SRN), which identifies the shareholder as the legal owner - the Australian equivalent to New Zealand’s holder number (HN). The issuer sponsored subregister is typically maintained by the company that issues the shares - usually through an appointed share registry. So while a shareholder will have just one holder identification number (HIN) for their entire portfolio for broker sponsored shares, they’ll have a different SRN for each holding for their issuer sponsored securities.

The issuer is the company going public in an Initial Public Offering (IPO) which is issuing - aka ‘offering’ - shares to be bought and sold by investors in the share markets.

The issue price, or offering price, is the final IPO share price that people who have received an allocation pay to receive shares as part of the company’s IPO. The final share price is usually not confirmed until the very last moment once the book-building process is complete. It might be different to the indicative price and is different again to the opening price. Learn more about how share prices are calculated.

An Initial Public Offering, or IPO, is the process of a company moving from private ownership - owned by their founders, financial backers and employees - to a public company, where the shares are listed on a share market for anyone to buy and sell. It’s sometimes also referred to as going public. Learn more about how IPOs work and how to research shares.

Institutional investors are the large investors who regularly participate in share markets, and are typically trading on behalf of their clients or customers – think big banks, fund managers, government and pension funds, wealth adviser groups and similar. During an IPO, institutional investors are approached by a company’s advisers to determine demand. In some IPOs, retail investors and individual investors also get a chance to participate. After the IPO, shares become available to all investors through the share markets.

An investor is a person or group that puts money into an investment - aka invests - with the hope of making a profit through capital gains, returns or income, like dividends or rent. Investors can be individuals, companies, mutual funds, institutional investors, or investment firms investing in shares, bonds, real estate or businesses. Their decisions are influenced by factors like risk tolerance, investment goals and market conditions. Successful investors do thorough research, keep informed about economic and share market trends, and strategically manage their portfolios.

Investing is buying assets and securities, such as shares or property, that investors hope can increase in value over time and provide returns like income, dividends, rent or capital gains. Investing can also be about spending time or money to improve your own life or the lives of others. Learn more about investing and how it’s different from saving.

Financial instruments, or instruments, are assets that are traded, like securities, commodities, or indexes. Essentially, an instrument is the building block for a derivative. Stocks, bonds, and options are all examples of financial instruments. Instruments are investments that can help individuals, businesses, and governments to raise capital, manage risk, and transfer assets.

Inflation is the rise in prices of goods and services over time. When inflation climbs, it can reduce consumer purchasing power, meaning money buys less that year than it did in the previous year.

Example:

If you had around $3 in November 2015 you could buy 2 litres of milk. In March 2024, that same $3 would buy you less milk, or you’d have needed nearly $4 to buy the same 2 litres of milk.

The most common way to measure inflation in New Zealand is through indexes like the Consumer Price Index (CPI) and the Wholesale Price Index (WPI). Inflation can be viewed as both positive and negative. People who have assets like property or commodities, may like a little inflation because it may increase the value of their assets. But when inflation rises extremely high in a short period of time, it can topple an economy. This happened in Venezuela in 2018 when hyperinflation reached over 1,000,000% per month, which caused the country’s economy to collapse. Read how to be money smart when inflation climbs.

The indicative price, or price range, is an estimated price range given to potential investors of an IPO to give them an idea of the final price they’ll likely pay for shares. It’s set by both the company and the underwriter. It’s not guaranteed that the final price will be in this range; it’s meant as a guide only for potential investors. Indicative price is different to opening price, and offering price.

These are passive funds (including exchange traded funds, or ETFs) that aim to track or mimic an index. Companies like Vanguard and BlackRock have created ETFs that both track the same S&P 500 index.

An index is a categorised list of investments, such as 'the largest 500 companies on the US share markets', or 'the 10 companies with the highest dividends on the NZX'. These lists are created and managed by credit rating agencies such as S&P Global Ratings, and investment managers often use these indexes a benchmark to compare their performance.

An investment is having financial resources, like money, in assets, such as shares, bonds, real estate, options or businesses, typically aiming to make a profit over time. Before making any investment decision, investors assess risks, potential returns, and market conditions.