South Island Index: Weathering the storm (7th Edition)A review of the performance of South Island listed companies during the September 2009 quarter |
South Island companies found the going tough in the three months to September 2009, with the 32-strong Deloitte South Island Index losing $166m worth of value in the quarter, a decline of 5.3 per cent. Overall, the combined value dipped below the $3b mark, slipping back to $2.98b.
For the first time since the Deloitte South Island Index’s benchmark opening date of 31 December 2006, it was overtaken by the NZX50, the ASX and the Dow Jones in terms of market capitalisation movement.
There were some positives amongst what could be seen as a haze of bad news. For example, Kathmandu has just launched its initial public offering as it looks to raise up to $457m on both sides of the Tasman – that’s a pretty strong signal that not everybody is predicting doom and gloom. And looking at the 32 companies’ performances in the quarter, there are actually 18 that have increased or held their market capitalisation steady in the past three months, with 14 losing ground.
Kathmandu is expected to join the Deloitte South Island Index next quarter, lifting the number of companies in the Index to 33.
Deloitte has seen those involved in New Zealand capital markets shift their focus away from revenue growth and market share. Corporate finance partner Paul Munro said: “The challenging economic environment has seen a switch as people zero in on underlying earnings and normalised profits instead. As the pendulum starts to swing back towards optimism we expect to see an increasing focus on bottom line results in terms of both profit and cash flow.”
If you would like to speak with someone about the Deloitte South Island Index, please contact Paul Munro.
Related articles
South Island companies endure tough quarter
Press release
Other media coverage
Tough quarter for PGG Wrightson, Pyne Gould
The Press - 23 October 2009
South Island companies' value drops $166 million
Otago Daily Times - 23 October 2009
South Island Index
(681.38 KB)
