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Cautious NZX debut for Building Society Holdings

Tuesday 1st February 2011

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Newly created "heartland bank" Building Society Holdings debuted cautiously on the sharemarket today, with its shares closing at their issue price of 88c.

The stock opened at 95c before retreating, and hit a low of 85c during the session.

Building Society, incorporating long-standing entities Canterbury Building Society, Southern Cross Building Society and Pyne Gould Corp's Marac Finance, merged last month and aims to become a registered bank.

It has net assets of around $310 million, total assets of around $2.2 billion, and an investment grade BBB- rating from Standard & Poor's.

"Given the current tone of the market, until you've got a few runs on the board, investors are going to be a little bit standoffish I would have thought," said Bryon Burke of Craigs Investment Partners.

"Given a different market you might see people getting in early, but there doesn't seem to be a rush, certainly from a retail perspective.

"Because there wasn't a capital raising I don't think institutional investors have been sold the story yet either," he said.

The new business needed to prove itself, but it had the potential to become an attractive stock eventually.

"We'd all like to see a good solid Southland bank emerge in a couple of years' time paying good dividends and making good money, but between then and now there's probably no rush, certainly from a retail investors' point of view."

The closing share price valued the company at $264 million. Just 304,136 of the 300 million shares on issue traded today.

The NZX welcomed the new listing.

"Having three institutions with such a strong shared history combining, and committing to keeping investors informed via our public markets, is positive for the finance sector and for the New Zealand investment community," NZX chief executive Mark Weldon said.



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