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WA Index reaches record high


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29 July 2011: The Deloitte WA Index has exhibited strong performance throughout the 12 months ended 31 May 2011, increasing in value by 36.5%.

Deloitte today released a special edition of the Deloitte WA Index at the opening of the Diggers and Dealers conference in Kalgoorlie, highlighting the performance of WA listed companies over the past 10 years.

Deloitte WA Managing Partner Keith Jones said in spite of political turmoil experienced in North Africa and the Middle East, and the nuclear disaster in Japan and European debt woes, the majority of WA listed companies showed strong performance, and the Deloitte WA Index closed the 12 months to May up AU$52.5bn, to finish at a value of AU$196.3bn.

“This represents a record high since inception of the Deloitte WA Index 11 years ago. Notably, during the past 12 months, the combined value of companies in the Deloitte WA Index has exceeded the previous record high achieved immediately prior to the Global Financial Crisis in 2008/09,” he said.

The strength of the Deloitte WA Index was underpinned by strong demand in commodities, reflected through price increases across all commodities surveyed in the 12 months to 31 May 2011.

The price of gold reached record highs in December 2010, and continued to grow steadily until April 2011, finishing up 26.1% over the year. This prompted an increase in demand for Silver, which recorded an increase of 107.5% in the year, as investors sought a cheaper alternative to gold amongst safe-haven investments on the back of global weather woes and the prolonged political turmoil in North Africa and the Middle East. Amidst these political tensions, oil production in Libya was put on hold, reducing oil supply and pushing up prices. Oil closed the 12 months to 31 May 2011 at US$102.70/bbl, up 38.8%.

Most global indices surveyed also regained some of the ground lost during the global financial crisis, with the US S&P 500 increasing by 22.2% in 12 months, on the back of positive macroeconomic data. Meanwhile, the FTSE 100 rose by 14.5%, while the All Ordinaries showed less resilience, increasing by only 7.5%, despite the boost received from the WA mining sector. The Nikkei, on the other hand, has not yet recovered from the nose-dive caused by the earthquake and subsequent nuclear disaster, and closed the year 0.8% lower.

Movers and shakers for 2011

The largest increases in market capitalisation for the year ending May 31 2011, included:

  • Bathurst Resources Limited (Bathurst) increased its market capitalisation from AU$15m to AU$846m, ranking 31 on the Deloitte WA Index. The 2011 March quarter saw Bathurst acquiring Eastern Resources Group, whose operations include the Takitimu and Cascade thermal coal mines in New Zealand and the prospective Whareatea West project.
  • Equatorial Resources Limited (Equatorial) saw an increase in market capitalisation from AU$15m to AU$239m. Successful exploration results in its Central West Africa projects, together with a successful capital raising has led to a 505% increase in share price over the year and helped the company break into the Deloitte WA Index Top 100.
  • Aspire Mining Limited (Aspire) rose by AU$373m, from AU$38m to AU$410m, following a AU$20m placement in October 2010 which resulted in a strategic partnership with SouthGobi Resources Limited (SouthGobi), a leading Mongolian coal producer. The subsequent acceleration of exploration and development of the company’s Ovoot Project resulted in a 660% share price rise over the 12 months.

The Diggers and Dealers special edition of the Index also highlights a number of emerging issues and areas of interest for the mining industry. This includes the ongoing influence of China on Australian resources development, the increasing focus on African investments and the growing skills challenge.

Please download the full media release below. 

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Contacts

Name:
Keith Jones
Company:
Deloitte Australia
Job Title:
WA Managing Partner
Phone:
Tel: +61 8 9365 7233
Email
kejones@deloitte.com.au
Name:
Warrick Hazeldine/Ryan McKinlay
Company:
Cannings Purple
Job Title:
Phone:
Tel: +61 8 6314 6300; Mob: +61 417 944 616
Email
whazeldine@canningspurple.com.au
Name:
Erin Buckley
Company:
Purple Communications
Job Title:
Phone:
Mobile: +61 4 0451 1161
Email
ebuckley@purplecom.com.au

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