Yesterday was a big day for Fonterra.
Prime Minister John Key opened the company’s new $200m Darfield site.
Shortly before the opening, Fonterra’s units were launched on the stock exchange making the biggest listing day stag that investors have seen for years.
The non-voting units, which launched at midday today, surged as high as $6.95, a 26 percent stag before closing at $6.85 from an offer price of $5.50. The fund’s turnover was $179.8 million as investors scrambled to get a slice of dairy exporter Fonterra Cooperative Group’s dividend stream.
Turnover in the NZX50 was lower, but substantial, at $175.2 million.
The most comparable float was the December 2011 listing of TradeMe, which rose 6.9 percent on its first day, and was up about 10 percent on its issue price by the end of its first week’s trading, said Andrew Bascand, at Harbour Asset Management.
The fund attracted more trading than the rest of the NZX50 put together and is likely to have been attractive to foreign investors, who took 42 percent of the initial issue of units after Tuesday’s book-build. . .
The price increase amounts to an extra $300,000 in value for the average Fonterra shareholder.
However, in a newsletter to shareholders, chair Sir Henry van der Heyden says the company’s focus will still be on the payout.
TAF was about removing redemption risk and giving farmers some more flexibility but making money from the milk they produce will be of more importance to shareholders than the price of units on the stock exchange.