KEY POINTS:
The market capitalisation of listed South Island companies took a hammering in the last quarter of 2008, mainly due to falls by companies in the primary sector.
The Deloitte South Island Index fell by 18.4 per cent in the three months to December, with $694 million wiped off the total market capitalisation of the companies in the survey, taking the total to $3.08 billion.
In contrast, the NZX-50 index was down 12.1 per cent in the quarter.
The $694 million fall for the South Island companies was mainly due to the performance of primary sector companies Pike River Coal, New Zealand Farming Systems Uruguay and PGG Wrightson, Deloitte said.
Collectively, the three companies lost a combined $426.7 million of market capitalisation in the quarter.
The index tracks the market capitalisation of more than 30 listed companies with a registered office or a substantial portion of their operations in the South Island.
For the fourth and third quarters combined, the capitalisation of companies in the index fell by a total of $1.37 billion or 30.7 per cent, while the NZX-50 lost 15 per cent.
Over the same six month period, the ASX All Ordinaries index fell 31.4 per cent and the Dow Jones industrial average was down 22.7 per cent.
Paul Munro, a corporate finance partner in Deloitte's Christchurch office, said the third quarter decline eroded all the value South Island companies had created during the past two years and effectively put the market back at square one.
"This most recent decline continues to eat away at value and puts us firmly in negative territory," he said.
But many opportunities would be available for South Island companies to grow.
The biggest improvement in terms of overall market value in the latest quarter was shown by Lyttelton Port which moved up four places in the index from seventh to third overall, reflecting a $25.6 million increase in market capitalisation to $260.8 million.
That happened after it was announced that Christchurch City Holdings was increasing its shareholding in the port company.
The port sector was the only one of eight sectors in the index to show an increase in value in the quarter, Deloitte said. The most pain was felt by the primary sector, which had a fall of 31.8 per cent, followed by retail which was down 29.9 per cent, and financial services which lost 15.6 per cent.
- NZPA