Fonterra copied Wall Street’s opening bell as it launched on the open market today, with a bell made from milk tank metal.
Units began the day listed at $5.50, the first trade went through at $6, then within 15 minutes they shot up almost 22 percent to $6.69 each.
NZX CEO Tim Bennett was at the launch, and says the figures are a reflection of the popularity of local investment.
“It just goes to show New Zealanders are very keen to invest in New Zealand businesses,” says Mr Bennett.
Prime Minister John Key says the demand for Fonterra shares should come as no surprise.
“I’m not terribly surprised, people can see worldwide trends and the demand for the products they produce,” says Mr Key.
Dairy in particular faces large demand from China, South-East Asia and the Middle East. Billions will be needed for future dairy development, but Fonterra’s farmer owners do not want to lose control to outside investors.
To allow for this, Andrew Bascand of Harbour Asset Management says they have come up with a scheme where farmers keep control – investors can buy units, but have no power.
“What you’re really getting is the economic… the cash-flow and dividends that a Fonterra shareholder gets, but you just don’t get voting rights,” says Mr Bascand.
The company showcased its Darfield plant, which opened in August and already processes almost 2.5 million litres of milk a day, turning it into powder.
More is to come for Fonterra next year, with the company planning to triple its production at Darfield and add its own railway siding.