Media release
August 9, 2012
Momentum slows for South Island firms
Deloitte South Island Index delivers modest 0.6% gain in the quarter to 30 June 2012
South Island listed companies have failed to sustain the strong gains seen in the first quarter of the calendar year
posting a modest gain of 0.6%, according to the latest Deloitte South Island Index.
The 18th edition of the Deloitte South Island Index, for the quarter to 30 June 2012, was up by $28.4 million or 0.6% in
market capitalisation on an impressive first calendar quarter which saw a gain of 7.1%. Despite the slower second
quarter the index is still up 7.7% for the first half of the 2012 calendar year with total market capitalisation for the
index now standing at $4.93 billion – 3.3% lower than a year ago.
Paul Munro, a corporate finance partner in Deloitte’s Christchurch office, says the Eurozone debt crisis has continued
to dominate the global economic outlook restraining market confidence making it a tough quarter for investors.
Despite slower growth, the performance of the Deloitte South Island Index during the June quarter fared well against our
benchmark indices, with the Dow Jones down 2.5%, the NZX 50 down 3.1% and the ASX All Ords declining 6.4% in the
quarter.
“The performance of the index in this quarter underscores the resilience of the region in the face of continuing tough
global economic conditions,” Mr Munro says.
“Stronger than expected first quarter GDP results for New Zealand have signalled that the Christchurch earthquake
recovery is gaining traction. Our view for companies in the Deloitte South Island Index remains positive over the medium
to longer term.”
The index’s top performer for the quarter was Heartland New Zealand, gaining $42.7 million in market capitalisation or
23.4% on the back of strong third quarter results driven by improved margins and decreased costs. Ryman Healthcare also
had a strong quarter gaining $40 million in market capitalisation or 2.6%.
The biggest decline in the quarter came from Bathurst Resources Limited, which lost $110.3 million in market
capitalisation, a decline of 16.8%, following announced changes to its escarpment plan for mining on the Denniston
Plateau to appease one organisation, leaving only two appellants to the project.
On an industry basis, the Other sector, led by Heartland New Zealand, had the best quarter in terms of both percentage
terms and market capitalisation appreciation. The sector gained $48.3 million (10.4%) and reached its highest point in
terms of quarterly market capitalisation since the March 2011 quarter.
While five of the eight sector indices experience percentage gains in market capitalisation, these gains were offset by
declines in the Energy & Mining sector (down 14.5%) and the Primary sector (down 2.2%).
To see the full Deloitte South Island Index quarterly report, go to www.deloitte.com/nz/southislandindex.
ends