Southern-listed companies' market capitalisation increased a huge 17.7% - or by $614 million to $4 billion- for the quarter to December last year, but largely on the back of a total almost $450 million raised by Pyne Gould Corp and PGG Wrightson.
The Deloitte South Island Index quarterly survey December, released yesterday, revealed it was the largest quarterly market capitalisation gain during the past three years.
The survey showed 17 of the 33 companies achieved a constant or increasing market capitalisation.
During that same period, 16 decreased in value, according to Deloitte corporate finance partner Paul Munro.
"It's no surprise that we have started to see some sizeable capital raising," he said in a statement yesterday.
"The performance of the index was definitely buoyed by the capital raising efforts of PGG Wrightson and Pyne Gould Corp."
Excluding the capital-raising gains, the Deloitte index outperformed the wider NZX top 50 companies index gain of 2.2% for the quarter, Mr Munro said.
PGG Wrightson raised almost $180 million in a December rights issue and Pyne Gould Corp raised $30 million from an institutional share placement and a further $237 million under a rights offer, while Ryman Healthcare further boosted the index when its shares rose by $125 million in total value, the first time in two years its shares had exceeded $1 billion in value.
On the downside, two of the three largest declines in market capitalisation were new entrants to the southern index: Silver Fern Farms, whose share price had halved by the end of December to 50c and Kathmandu Holdings, whose initial public offering price of $2.13 per share fell 4.4%, or a $19 million loss in market capitalisation.
Two Dunedin-based companies also contributed to the index boost, with the Pacific Edge Biotechnology Ltd share price up almost 65%, from 17c, to trade around 28c in December.
Kaikorai Valley-based Scott Technology's shares climbed to 35c after a positive full-year profit announcement - gaining 35% or $10 million in its market capitalisation, Mr Munro said.
Debt levels for New Zealand and Australian companies were down about 20 percentage points; close to historical averages of 65%, he said.
While banks were now more willing to lend, with more access to credit and amid rising optimism in the economic outlook, they were charging higher interest on loans.
"Accordingly, we doubt that the recent capital-raising activity has run out of steam just yet and companies such an Synlait and Pike River Coal have made murmurs in the market about looking to issue equity to the public over the next 12-months," Mr Munro said.
The development sector and its four companies - Ryman, the National Property Trust, NZ Windfarms Ltd and Apple Fields Ltd - remained the largest contributor of market capitalisation at $1.17 billion, a 10.2% increase, followed by the nine companies in the primary sector at $990 million and its 23.6% growth.
Mr Munro highlighted the financial services sector's three companies having the largest quarterly gain, 398%, to improve market capitalisation to $409 million.
