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The State of the Deal and Deloitte Queensland Index - Q3 2022

November 2022

Welcome to The State of the Deal including the 194th edition of the Deloitte Queensland Index, a review of Queensland listed companies on the Australian Securities Exchange (ASX).

Global equity markets have seen significant volatility in Q3 2022, driven by concerns around rising inflation and a possibility of a global recession. Central banks have continued to increase interest rates, putting downward pressure on company valuations. Queensland-listed businesses have remained resilient against this backdrop, with the total capitalisation of the Deloitte Queensland Index staying stable at $111.5b.

Our Queensland Economic Update considers headwinds and tailwinds currently facing Queensland. Amongst the headwinds are interest rate rises and tight labour market, while tailwinds include the resurgence in household consumption and growth in the value of Queensland’s exports such as coal, gas and beef.

Key highlights from the report include:

The Deloitte Queensland Index remained stable quarter-on-quarter at $111.5b

the Deloitte Queensland Index largely held its ground in Q3 2022, with only a small 0.01% decrease from the previous quarter, outperforming all major global indices which reported larger declines. Strong performance in the Energy & Resources sector offset declines across all other sectors in this past quarter.

Rise in the Energy & Resources sector

resource-rich Queensland is well-placed in the current high energy price environment brought about by the global energy supply crunch, with record high commodity prices benefitting companies producing and exporting energy. The E&R sector now accounts for 28.9% of the total market capitalisation of the Deloitte Queensland Index, and four out of top six performers by dollar movement in market capitalisation are in this sector.

Outlook remains positive for M&A

sentiment amongst dealmakers is positive as the appetite for quality assets from seasoned buyers remains strong. Significant Queensland-based transactions in Q3 2022 included Suncorp Group Limited’s announced sale of their banking business, Suncorp Bank, to Australia and New Zealand Banking Group Limited for c.$4.9b.

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