The Deloitte South Island Index steps up the pace
South Island listed firms collectively grew their market capitalisation by $2,305.3 million (10.3%) in the quarter ending 30 June 2018
Christchurch, 9 August 2018 – The Deloitte South Island Index stepped up the pace after a subdued start to the year, growing $2,305.3 million (10.3%) in the quarter to 30 June 2018.
The Deloitte South Island Index’s 10.3% growth led all benchmark indices tracked. The ASX ALL Ords recorded the next largest increase, growing by 7.2% during the quarter. And the S&P/NZX 50 Capital Index grew 6.8% in market capitalisation, while the Dow Jones recorded a modest 0.7% increase, during the quarter to 30 June 2018.
Skyline Enterprises became the fifth company on the Deloitte South Island Index to achieve market capitalisation greater than $1 billion, growing $170.2 million (20.0%) during the June quarter.
The collective increase of the “Top 5” companies (all with market capitalisation over $1 billion) was $2,086.0 million (11.8%), representing 90.5% of the Index’ total market capitalisation growth during the quarter to 30 June.
Scott McClay, a corporate finance partner in Deloitte’s Christchurch office, says it is positive to see more South Island companies pushing through the $1 billion market capitalisation barrier.
“A year ago there were only three $1 billion listed South Island companies, and now there are five with a sixth knocking on the door. It provides evidence that, despite the trend we saw of companies moving to the North Island over the last decade, good businesses can thrive in the South Island and be recognised by investors for their efforts,” says Mr McClay.
Ryman Healthcare recorded the largest increase (in dollar terms) in market capitalisation, increasing by $690.0 million (13.0%), closely followed by Meridian Energy $679.2 (9.3%). Synlait Milk built on growth recorded in the first quarter of 2018 to finish the June quarter up $546.6 million (36.4%). And EBOS Group recorded no change in market capitalisation for the quarter ended 30 June 2018.
Outside of the “Top 5”, the Index’s best performers (in percentage terms) were Pharmazen whose market capitalisation increased 44.8% during the June quarter, followed by Kathmandu Holdings increasing their market capitalisation by 22.8%.
The most significant declines (in percentage terms) came from SeaDragon which dropped 40.3%, followed by Syft Technologies and Pacific Edge which fell 29.2% and 24.7% respectively in the quarter to 30 June.
The smallest 10 companies collectively declined, recording an 11.9% fall in market capitalisation.
The Deloitte South Island Index’s strong performance for the second quarter for 2018 was seen across the board with six of the seven sectors building on from a quiet start to 2018. The biggest increase was in the Retail Sector, which increased by 20.7%, and the Primary sector followed with growth of 20.5%. The sole sector decline was recorded by the Technology sector, falling 22.0%.
To see the full Deloitte South Island Index quarterly report, go to www.deloitte.com/nz/southislandindex.