Primary sector leads capitalisation growth

New Zealand King Salmon Investments' market capitalisation grew $41.4 million during the second quarter, putting it in the top seven of 31 companies measured. Photo: supplied.

The Deloitte South Island Index of listed companies' market capitalisation booked only modest growth for the second quarter to June, collectively up 2.8% to $543.6 million.

The Deloitte South Island Index measures the values of 31 company shares, on both the NZX and unlisted platforms, that have large exposure to trading in the South Island.

Four of the seven sectors covered posted positive movements in the quarter to June,  the primary sector leading the way with a gain of 10.1%, corporate finance partner in Deloitte's Christchurch office Scott McClay said.

"Despite a slowdown in investor sentiment, the medium-sized companies on the index still managed to achieve modest growth," he said.

Dunedin's Scott Technology's capitalisation rose 12% to $230 million, Silver Fern Farm's rose 5.7% to $55.2 million, Blis Technologies' declined 8% to $35.7 million and South Port's, in Bluff, rose 14% to $155.6 million.

Historically, index results in the second quarter of the year go into "hibernation", which was reflected in the latest results, Mr McClay said.

The collective growth of the index's top three companies for the quarter was $108 million, or up 0.8%.

The positive overall result was achieved due to Meridian Energy's strong quarter. Ebos Group and Ryman Healthcare, although in the top three, both suffered declines, dropping by, respectively, $113.9 million, or 4.1%, and $60 million, or 1.4%.

Mr McClay said strength in the primary sector was driven by Blue Sky Meats, New Zealand King Salmon Investments, PGG Wrightson and Synlait Milk, which was a highlight of the quarter.

Mr McClay described the index's quarterly 2.8% gain as "reasonable". It was outperformed by both the S&P/NZX 50 Capital Index and the Dow Jones, which grew  by 5.1% and 3.3% respectively.

Outside the top three, the index's best performers were Synlait Milk, with its capitalisation up $138.1 million, Skyline Enterprises, up $102.1 million, Heartland Bank, up $77.7 million, and New Zealand King Salmon Investments, up $41.4 million, Mr McClay said.

After Ebos and Ryman, the next largest falls during the quarter were Dunedin-based cancer diagnostic company Pacific Edge, down by $27.8 million, Scales Corporation, down $19.8 million, and Syft Technologies, down $16.1 million.

simon.hartley@odt.co.nz