Listed Sth Island firms outperform NZX

ALAN WOOD
Last updated 13:30 23/07/2013

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The value of listed South Island companies continues to grow as the Christchurch earthquake rebuild gets under way to help lead the country out of its economic doldrums, an accountancy firm says.

Financial services firm Deloitte, which compiles a South Island share index of 31 listed companies, says the companies' combined value has risen $601 million in value, or 9.8 per cent in market capitalisation, in the three months to June 30.

The latest results see the index up $2.16 billion, or 47.1 per cent, in the year to June 30, with total market capitalisation now $6.74b.

The index fell slightly last month, which Deloitte said was possibly linked to the usual drop during winter.

The quarterly gain followed increases in the December, September and June quarters.

The annual review of the quarterly index report was released at a function in Christchurch today attended by Finance Minister Bill English and South Island business leaders.

Deloitte partner Paul Munro said 21 of the 31 companies in the index grew during the past year.

The South Island index's 47.1 per cent annual growth outperformed the NZX 50, which grew 30.6 per cent over the same period.

The Dow Jones grew 15.8 per cent and the ASX All Ords added 15.5 per cent in the year to June 30.

The Deloitte index growth during the past 12 months was a reflection of investors' recognition of southern resolve after the quakes, Munro said.

"The resilience that South Island companies have shown over recent years, in adverse economic conditions, is remarkable," he said.

Investors ended up scrambling for shares in established companies like Ryman Healthcare, Kathmandu and Skyline Enterprises.

He said the economic buoyancy created a positive environment for new capital raising, as seen in the successful share issues for Moa Group, SLI Systems and Ebos Group.

Ryman was the standout performer for the year with an impressive $1.45b increase in market capitalisation on the back of its 11th successive year of record profits.

Ebos retained second place on the index after gaining $232.7m in market capitalisation, and Kathmandu Holdings increased its market capitalisation by $252.5m over the 12 months.

The largest fall in market capitalisation was by Bathurst Resources, dropping $263.9m amid legal proceedings.

Silver Fern Farms and NZ Windfarms had a disappointing year, dropping $35.1m and $23.9m respectively.

Every company in the biotechnology sector achieved positive results over the past year, but most of the sector's growth was through the $111.0m gain in market capitalisation by Pacific Edge.

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Every sector except energy and mining gained market capitalisation during the year.

"The investments in the Christchurch rebuild and the resilience of the South Island's primary sector continue to underpin the performance of the wider South Island economy, creating a solid platform for continued growth," Munro said.

In the next 12 months, the index would probably see the addition of Synlait Milk and Meridian Energy on the NZX.

Synlait Milk, with an approximate market capitalisation of $322m, would join the index in fifth place, while Meridian Energy, with an expected market capitalisation of more than $5b, would be the largest company on the index once listed, Munro said.

- BusinessDay.co.nz

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