Deloitte SA E&R Index underperformed relative to the equivalent S&P/ASX benchmarkDOWNLOAD
Monday, 22 August 2011: The Deloitte SA E&R Index (which comprises forty South Australian-listed Energy and Resources companies) decreased by 12.1% during the three-month period ended 31 July 2011, compared to a decrease of 6.4% (on a simple average basis) for the S&P/ASX Energy, Utilities and Metals & Mining Indices.
Deloitte South Australian Energy & Resources Partner, Jason Handel said the weaker performance of the SA E&R Index was predominately driven by the decrease in the market capitalisation of Santos Limited (Santos), Flinders Mines Limited and Toro Energy Limited. These decreases were partly offset by the market capitalisation increase of Envestra Limited, Beach Energy Limited and Sundance Energy Limited. Whilst there were no specific events driving the decrease in Santos’ share price, the decrease may reflect uncertainty caused by the Carbon Tax announcement on 10 July 2011.'
“It will be interesting to see what happens with the Index over the next quarter to 31 October 2011 especially given recent events on the global capital markets.
The Deloitte SA E&R Index decreased by 12.1% in the quarter, with the total capitalisation of South Australian-listed E&R companies decreasing by approximately $2.068 billion from $17.117 billion at 30 April 2011 to $15.049 billion at 31 July 2011.
“However, with the exclusion of Santos from the Index, the decrease in the quarter is 8.3%, which is broadly consistent with the S&P/ASX, Energy, Utilities and Metals & Mining Indices.
The Deloitte SA E&R Index decreased during the six months to 31 July 2011 by 1.1%. The S&P/ASX indices decreased by 4.3% (on a simple average basis) over the same period. Excluding Santos, the Deloitte SA E&R Index increased by 6.9% over the six months to 31 July 2011.
“This continues to highlight that Santos has a significant influence on the Deloitte SA E&R Index,” Jason Handel said.
The Deloitte SA E&R Index outperformed in comparison to the equivalent S&P/ASX Indices for the 12 months to 31 July 2011, increasing by 18.5% compared to a 4.7% increase in the S&P/ASX indices (on a simple average basis).
“The 12-month performance to 31 July 2011 reveals a massive increase of 85.4% if Santos is excluded from the Deloitte SA E&R Index,” Jason Handel said.
S&P/ASX Indices Analysis
The publication indicates that both including and excluding Santos, the Deloitte SA E&R Index outperformed the broader Deloitte SA Index during the 12 months to 31 July 2011. This trend is likely driven by rising commodity prices.
The Deloitte SA E&R Index is compiled from publicly available information available on the Australian Securities Exchange Limited (ASX) website on 31 July 2011 and is based on the market capitalisation-weighted share price performance of each South Australian listed E&R company, and those companies with an industry classification of Energy, Utilities or Metals & Mining.