Qld Indices show strength of marketDOWNLOAD
Wednesday, 16 February 2011: During the three months to January 31 2011, the Deloitte Queensland Energy and Resources (E&R) Index has remained remarkably steady despite the impact of the devastating Queensland floods.
The ASX All Ordinaries increased 2.5% over the same period.
The report shows that the most significant movement in market capitalisation during the January quarter 2011 came from Aston Resources Limited (Aston), whose market capitalisation increased $452 million (35.5%). The market responded to the ever-increasing viability of Aston’s Maules Creek Coal Project: a project that is now Australia’s seventh largest coal project by marketable reserves and is expected to produce coal for up to 30 years.
“This stable result to 31 January is heartening considering the sector has just faced the worst floods on record in Australia,” said Queensland Managing Partner, Mr Tim Biggs.
“Of course taking prompt, informed and decisive action can strongly influence the rate of recovery, so Deloitte is working closely with clients in the sector on issues such as insurance claims, technology, business continuity plans, revisions of forecast profits and operations and ASX / shareholder announcements,” he said.
“While some businesses are estimating disruptions to business for between three to six months, we have seen strong motivation to ‘get on with it’ and drive vital revenue back into an economy that is facing a GDP loss of around 1% ($13 billion) from the floods alone,” he said.
Qld E&R stocks increased 62.5% in last 12 months
Even more to the point, however, in the 12 months to 31 January 2011, the Deloitte Qld E&R Index increased 62.8%, compared with a 5.5% increase for the ASX All Ordinaries. This strong annual performance is largely due to the exceptional performance of Lihir Gold Limited up until its merger with Newcrest Mining Limited.
According to Corporate Finance Partner, Mr Robin Polson, this result is indicative of the strength of the resources sector in Queensland. “Though it may take some companies three to six months before operations return to normal and initial reports of declines of up to 20% of exports are being reported, the continued strong global demand for commodities can only continue to play to our advantage in the long term,” he said.
The strength of the overall Queensland market is also emphasised by the results from the Deloitte Queensland Stock Exchange Index, which over the 12 months to 31 January 2011 increased 14.2%. This is compared to an increase of 5.5% for the ASX All Ordinaries.
Despite the floods, the Deloitte Qld Index increased 0.4% during January 2011 alone.
The largest increase in market capitalisation in January came from QR National Limited (QR National), which increased $122 million (1.8%), despite the floods which have impacted the company’s coal network and its customers. QR National has estimated that the natural disaster will reduce profit by $70 million. However, this loss was less than investors expected, causing an increase in the market capitalisation during the month.