More than $100 million in market capitalisation was wiped off publicly listed South Island companies in October, but they appear to have weathered the economic turmoil better than those in the North Island.
Given the market volatility, Deloitte ran a special assessment of the performance of South Island companies for October, and found the index fell 2.8% compared to the NZX 50 Index, which fell 8.7% over the same period.
Overall, total market capitalisation of listed South Island companies fell $107.2 million to $3.671 billion.
A corporate finance partner with Deloitte in Christchurch, Paul Munro, said the index showed more stability in October than September, when it fell by 15%.
"In the three months from July to September, we saw the South Island Index fall 15.2%, but it was September when the real pain was felt with a 15% decline."
South Island companies showed some resilience and stability in October compared to the NZX 50 Index which fell 8.7% and the ASX Ordinaries and Dow Jones in the United States which both fell 14% for the month.
The biggest declines recorded by South Island companies were from the biotechnology sector, down 15.2%, and retail sector, down 12.7%, while financial services, specifically Pyne Gould Corporation, grew their market capitalisation 13.1%.
Mr Munro said the South Island index had a major share-value correction in September, later than other stocks, but the more conservative nature of southern businesses and reliance on traditional sectors confirmed anecdotal evidence the South Island was so far handling the recession better than the North Island.
"This is reflected in the index which is, if you like, a proxy for the rest of the economy."
It also confirmed that listed South Island companies tended to be conservative, well established, have weathered good and bad times and were less exposed to boom and bust industries.
The finance sector was an example.
The market reacted favourably to news Pyne Gould Corporation intends launching New Zealand's only publicly listed bank, pushing its market capitalisation $49 million, or 16%, higher.
Canterbury Building Society, an old and well established company, also retained its strength, declining just 3%.
The index was also helped by the injection of capital into Windflow Technologies by Mighty River Power, rising 34% or $9 million, and investors viewing positively rural servicing company PGG Wrightson, and its involvement in the rural sector, which was seen as providing some insulation from the national and global economic downturn.
Its market capitalisation grew 7%, or $34 million.
The South Island's largest company, Ryman Healthcare, saw its capital shrink 3%, or $25 million, while Pike River Coal slipped 17%, or $78 million.
Dunedin's Scott Technology had an 18% decline in market capitalisation, falling $6.5 million for the month to $29.7 million.
The retail sector has been hit hard as consumers slow their spending, and this was reflected in Smiths City Group which has seen a 20% reduction in its market-cap.
