The State of the Deal and the Deloitte Queensland Index – Q1 2024
March 2024
Welcome to The State of the Deal, featuring the 200th edition of the Deloitte Queensland Index, an analysis of Queensland-listed companies on the Australian Securities Exchange (ASX).
In the wake of Australia's economy recording a subdued GDP growth of 0.2% for Q4 2023, the slowest since the pandemic with an annual increase of 1.5%, concerns about softening domestic demand and inflationary pressures remain prominent. This period has seen households reducing discretionary spending and a deceleration in investment, despite government efforts to stimulate growth through increased spending on healthcare and social benefit.
Against this backdrop, the Deloitte Queensland Index returned 5.1% in Q1 2024 compared to 4.1% return of the S&P/ASX All Ordinaries Index, 5.6% of the Dow Jones Industrial Average, 20.6% of the Nikkei 225 and 2.8% of the FTSE 100. The Hang Seng delivered a negative 3.0% return.
Our Queensland Economic Update explores the key drivers of Queensland’s economy in the first quarter of 2024 and the prospective future, including Queensland's household spending increasing by 0.2%, reflecting modest economic resilience. With a population boost of 2.7% and easing cost pressures, household consumption is poised to grow and despite a recent dip in housing investments, a recovery is on the horizon. Export strength, particularly in coal, continues to underpin the state’s economic prospects, with an anticipated growth of 2.0% for the 2024-25 period.
Key highlights from the Q1 2024 report include:
- The Deloitte Queensland Index returned 5.1% in Q1 2024: The total adjusted market capitalisation of QLD-based ASX listed companies increased 5.1% from Q4 2023 to in Q1 2024 based on the relative index. In the 12 months leading up to March 2024, the Deloitte Queensland Index increased by 10.7%, outperforming the S&P/ASX All Ordinaries Index, which recorded a 10.6% rise over the same period.
- Marginal growth in Financials Sector: the increase in the financial sector was driven by a $3.2b increase in market capitalisation of Suncorp due to the Australian Competition Tribunal's decisive overturning of the Australian Competition and Consumer Commission (ACCC) prior refusal to authorise the merger between ANZ and Suncorp Bank in August 2023.
- Contraction in Energy and Resources: Share of the total index for the E&R sector reduced 7.7pp between Dec-23 and Mar-24 due in part to a reduction in share prices from some of QLD coal-based producers, linked to a reduction in average Metallurgical and Thermal coal prices in the first quarter of 2024.
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