Energy companies shine in the December quarterDOWNLOAD
14 January 2011: The Deloitte South Australian Stock Exchange Index (the Deloitte SA Index) increased by 5.5% during the three months to 31 December 2010, compared to an increase of 11.2% in the previous quarter.
David Hill, Deloitte Corporate Finance Partner, said, “The majority of companies in the Deloitte SA Index experienced share price increases in the final quarter of 2010 and, as such, the Deloitte SA Index outperformed the ASX 200 for the three months to 31 December 2010.
“A significant portion of the increase in the Deloitte SA Index can be attributed to share price increases of the largest constituents by market capitalisation of the Deloitte SA Index, being Santos Limited, Argo Investments Limited and Boart Longyear Limited.”
Many of the major world indices also increased in the three months to 31 December 2010. The US S&P 500 and FTSE 100 experienced increases of 10.2% and 9.2%, respectively. In addition, the Nikkei 225 recorded an increase of 6.3%. The S&P/ASX 200 benchmark increased by 3.5% over the same period.
Boart Longyear’s share price increased by 44.3% for the three months to 31 December 2010. While the increase in Boart Longyear’s share price could not be attributed to a specific announcement, the increase may reflect an improved outlook for the Australian mining services industry. This was evident in Boart Longyear’s announcement on 17 December 2010 indicating continuing price increases and demand for the company’s services during the 2010 December quarter.
Argo’s share price increased by 8.2% during the three months to 31 December 2010. The share price increase reflected positive market sentiment for Argo’s top ASX listed investments as well as Argo’s announcement of a profit upgrade on 25 October 2010. The announcement indicated the company’s operating profit after tax would be 20% above the previous comparable period (inclusive of the anticipated effects of the proposed merger of Milton Corporation Limited and Choiseul Investments Limited via scheme of arrangement, which was court approved on 1 December 2010).
The strong contribution from Santos primarily reflected positive market sentiment following the company’s announcements on 17 December 2010 of the sale of an aggregate 15% interest in the company’s GLNG project for USD665 million to Korea Gas Corporation and Total SA and Santos’ successful completion of a AUD500 million equity raising on 20 December 2010, which finalised the equity funding of the GLNG project.
On an absolute share price performance basis, energy and materials companies recorded the largest percentage share price increases for the three months to 31 December 2010. The best performers were Thor Mining PLC, which increased by 145.5%, Sundance Energy Australia Limited (97.3%) and Digislide Holdings Limited (95.0%).
The three companies that recorded the highest percentage share price decreases for the December quarter 2010 were Geothermal Resources Limited (-50.0%), Island Sky Australia Limited (-38.9%) and Austofix Group Limited (-36.8%).
Initial Public Offerings, Additions and Removals
One company was added to the Deloitte SA Index following the successful Initial Public Offering of Kagera Nickel Limited, which closed on 31 December 2010 15% above its original list price of $0.20 per share on 29 October 2010.
One company, Reclaim Industries Limited, was added to the Deloitte SA Index in the 2010 December quarter due to a change in registered office from Western Australia to South Australia on 8 October 2010.
One company, Adtrans Group Limited, was removed from the Deloitte SA Index in the 2010 December quarter due to the company being delisted from the ASX on 20 December 2010 following completion of the takeover by A.P. Eagers Limited.
For more information, please download the media release below.