The Deloitte South Island Index of 31 listed companies’ value has stumbled in the first quarter, following four consecutive quarters of growth in calendar 2017.
South Island listed firms collectively declined $342.1 million, or 1.5% over the quarter to March, to a total $22.46 billion. Market capitalisation is the total value of all ordinary shares on issue for each company.
Corporate finance partner in Deloitte's Christchurch office Scott McClay said three of the index's seven sectors posted positive movements for the quarter with the retail sector leading the way with a 7.2% gain, followed by the primary sector rising 3.9%.
“The Deloitte South Island Index experienced a subdued start to the year, failing to continue its growth over the previous four quarters,” he said. There were changes in the top companies with market capitalisation over $1 B.
Synlait Milk was the only index participant to record capitalisation growth, gaining $213.3 M, or 16.5%, Ryman Healthcare recorded no change, at $5.29 B, while both Meridian Energy and EBOS Group recorded declines of respectively $179.4 M, 2.4%, to $7.31 B and $91.5 M, 3.2%, to $2.73 B.
Heartland Bank was the fifth index company to achieve capitalisation greater than $1 B in the December quarter, but it subsequently declined to $980.6 M, down $178.2 M, or by 15.4%.
McClay said in percentage terms, the index growth was led by the retail sector which grew by 7.2%.
Kathmandu's strong performance saw its $42.8 M, or 8.7%, capitalisation increase more than offset Smith City Group's $5.3 M, or 16.8%, decline.
In the technology sector, Pharmazen and Blis Technologies recorded no change during the quarter. Syft Technologies and Pacific Edge both held back the technology sector, each recording declines of respectively 1.7% and 1.3%.
The Primary sector grew $117.2 M, or by 3.9%, led solely by Synlait Milk, which
continued to build on their strong 2017 recorded results, finishing the first quarter of 2018 up $213.3 M, or by 16.5%, he said.
Marlborough Wine Estate and PGG Wrightson recorded no growth in the quarter.
The biggest decline on a percentage basis was booked by Silver Fern Farms, which was down 38.6%, or by $29.1 M, to $46.2 M. The Silver Fern Farms decline was followed by Smiths City Group which fell by 16.8%, $5.3 M to $26.3 M and SeaDragon, falling 16.6%, by $4.5 M to $22.6 M.
McClay said while the performance of the largest companies had buoyed the index' growth in recent quarters, the smallest 10 companies stepped up during the March quarter, collectively growing 6.4% in market capitalisation.
Gold miner OceanaGold Corporation and dairy manufacturer A2 Milk are not included, being Australian-domiciled companies.
*Simon Hartley is senior business reporter and assistant chief reporter for the Otago Daily Times.