Market capitalisation growth by nine of the 10 largest companies on the Deloitte South Island Index was boosted 5.6%, or by more than $1billion, for the quarter to March.
Overall, the 30 South Island listed firms collectively grew $1.03billion in market capitalisation in the quarter, up from more than $18.4billion the previous quarter to $19.5billion.
The index’ companies are not necessarily headquartered in the South Island, but all have a large exposure in the south.
Deloitte’s corporate finance partner in Christchurch Scott McClay said the top three largest companies set the tone for the quarter, collectively growing by $898.0million, or by 6.8%.
"It’s pleasing to see the index start the year in a positive fashion, following the disappointing last quarter of 2016," he said in a statement yesterday.
The top performer was Meridian Energy, which gained $512.6million or 7.7% in market capitalisation and reported a third successive year of growth in interim earnings, up 6% on the previous year.
"Several companies reported positive interim and annual results during the quarter and investors responded positively to these financial fundamentals," Mr McClay said.
Around Dunedin, Scott Technology’s market cap grew 27.9% to $205.4million, Pacific Edge grew 2.8% to $231.6million and Blis Technologies declined 7.4% to $41million.
In Southland, South Port declined 5.5% to $136.4million and Blue Sky Meats was unchanged at $15million.
Mr McClay said it was notable growth was across all sectors, which indicated the South Island economy was not purely reliant on the performance of its largest companies and was a good sign for optimism in the year ahead.
The other top performers for the quarter included EBOS Group, up $235.4million or 9.3%, Ryman Healthcare, up $150million or by 3.7%, Heartland Bank, up $92.5million or 12.4%, and Synlait Milk, up $64.8million or 11.6%.
All seven sectors of the index posted positive movement. Manufacturing and distribution led the way, with a 9.2% gain, followed by the energy and mining, up 7.7%, Mr McClay said.
The Deloitte index’ 5.6% quarterly gain outperformed other indices tracked, bettering the S&P/NZX 50 Capital Index, which was up 3.1% and overseas it outshone both the Dow Jones and the ASX All Ords, which grew 4.6% and 3.2% respectively during the quarter. The two most significant declines in market capitalisation during the period were Silver Fern Farms and Skyline Enterprises, respectively down by $37.1million, or 41.5%, and $34.1million, or 4.6%.
