Uncertainty in the log export trade did little to dampen enthusiasm for shares in Napier Port, which debuted on NZX today at a big premium.

The stock debuted at $2.91 — a 16 per cent premium to its $2.60 issue price — later escalating to a peak of $3.04 before closing at $2.95, up 35c or 13.4 per cent on the day.

The initial public offer for the partial sell-down by its owner, the Hawke's Bay Regional Council, raised $234m.

Chief executive Todd Dawson said there had been no drop off in trade at the port after log prices slumped early in the year on the back of slackening demand from China.


The offer's product disclosure documents listed among "market risks" access to, or demand from, China and other key Asian markets.

Exports to Asian markets made up 84 per cent of the port's total exported cargo volume by weight in 2018 - 65 per cent to China.

About 90 per cent of log exports by weight from the Port were sent to China in 2018.

"If access to these key markets was impaired, or some other event occurred that resulted in the demand for cargo from the port decreasing, this could have a material impact on our financial position and performance," the document says.

Dawson told the Herald there had been no drop off in log volumes going through the port and that log traders had reported a bottoming out of prices.

"Most of them have been around for a while they have seen cycles come and go," Dawson said.

"The reality is that the harvest is coming on strong from all those plantings that happened in the 1990s," he said.

From a port perspective, the timber is still flowing strongly - we have not seen any drop off in that regard and it's business as usual," he told the Herald.


"Log traders feel that the price slump has recently bottomed and that there are signs of recovery happening already," he said.

Napier Port is just the second new equity IPO to list this year after cannabis research company Cannasouth's debut in June.

Napier Port shares were priced at the top of a $2.27-$2.60 indicative range and the issue was "significantly oversubscribed" during the IPO process.

As a result of the issue, the council's 100 per cent holding has dropped to 55 per cent.

The offer was lead managed by Deutsche Craigs and Goldman Sachs, with Forsyth Barr as co-manager.

After ringing the bell to welcome in trading of the Port's shares on the NZX, chairman Alasdair MacLeod said the success of the IPO would allow the port to invest in the infrastructure.

"Today is the culmination of a 5-year journey that has seen the Port, Hawke's Bay Regional Council and the broader community working in close partnership towards a shared goal," MacLeod said in a statement.

Napier Port plans to build the multi-purpose "6 Wharf" on the north side of the existing container terminal.

The council has reduced its financial exposure to port growth and gained the capital for investment in the broader needs of the region, he said.

The IPO involved the offer of 90 million shares, representing a 45 per cent stake in the company.

Of the capital raised, $110.2m is to be used to repay the Port's existing debt and provide cash and undrawn debt facilities sufficient to meet the Port 's future capital requirements, including the new wharf.

A further $107.9m of the capital raised in the IPO had enabled the Hawke's Bay Regional Council to realise a portion of its investment in the Port.

Todd said the offer had taken five years to plan.

Construction of the new wharf is due to start next month.