Ryman leads growing SI listed firms
The value of listed South Island companies continues to grow as the earthquake rebuild gets underway with property-based retirement village operator Ryman Healthcare leading what could be a continuing advance.
Accountancy firm Deloitte compiles a South Island share index of 30 companies and says the companies' combined value has risen $405 million in value, or 7.7 per cent in market capitalisation, to a new record for the index in the December quarter.
The latest quarter's results see the index up $1.2 billion or 27.4 per cent during the year to December 31, 2012 with total market capitalisation now standing at $5.68b, the highest point since its inception in 2007.
The gain followed other increases in the September and June quarters.
Paul Munro, a partner with Deloitte, said the index reached a new high with 7.7 per cent gain in the three months to December 31, 2012, and may be set to break more records in 2013.
Munro said the majority of the index's year to date increase in market capitalisation is attributable to the share price growth of Ryman Healthcare, which had increased by approximately $920 million or 68 per cent in the year to December 31, 2012.
The index's 7.7 per cent growth outperformed all benchmark indices during the December quarter, with the NZX50 up 6.1 per cent, the ASX All Ords up 5.9 per cent and the Dow Jones down 2.5 per cent.
Key economic indicators and other factors in New Zealand were showing a lot more stability, with interest and exchange rates stable, although the currency was challenging for exporters. "Indicators around unemployment are trending in the right direction which serves the Canterbury economy [well], and the South Island economy by extension," he said. Christchurch had in 2012 seen frustration about the pace of recovery from the earthquakes, but momentum now seemed to be building. It would crank up further in 2013.
Munro noted Ryman had declared its intention to be the largest company on the NZX by market capitalisation and managing director Simon Challies reported that the company was attracting interest from investment funds in Australia and elsewhere.
"Ryman will continue to go from strength to strength, they will get a bit of a boost from the rebuild. Scott Technology have potentially got a role to play indirectly through the rebuild."
Pacific Edge Biotechnology had a strong quarter, gaining $68.2mor 82.9 per cent in market capitalisation after launching its first commercial product for the detection of bladder cancer.
PGG Wrightson was another strong performer gaining $67.9m or 25.7 per cent in market capitalisation, moving into fifth position on the index, swapping places with Skellerup Holdings.
The biggest decline in the quarter came from Silver Fern Farms, which lost $20.1m in market capitalisation, a decline of 23.6 per cent, following the release of its 2012 results reporting an operating loss after tax of $31m. "There are challenging times for that red meat sector. They've got to work out a solution," Munro said.