WA Index

The market capitalisation of Western Australian listed companies climbed 6% over the month of November, to close at $297.3bn. The rise in the WA Index was assisted by the listing of APM Human Services International Limited, with the company taking 15th place in its debut month. The increase in the Index bucked the global market trends– with the All Ordinaries, US S&P 500, FTSE 100 and Nikkei all losing ground over the month. The high flight of lithium also continues, with the standout commodity up another 7%, bringing its year-on-year growth to 326%.

Download the list of WA’s top 100 listed companies, explore the insights below, and if you do not currently receive our WA Index, please register to be added to our distribution list.

Highlights:

1. Commodity review
2. Performance of WA Index and global indices
3. WA Index movement
4. Top performers of the month.

If you have any questions in relation to the Deloitte WA Index please contact Dave Andrews.

Commodity review

Coking coal, LNG and crude oil were the biggest absolute value movers in November – with gold and thermal coal closing out the month square. Thermal coal has not gained the usual price hike associated with the winter period in China, as temperatures have not yet fallen as significantly as in previous years. The gold price remained mellow despite fresh uncertainties around the new Omicron COVID variant and the possibility of increased interest rates.

• Coking coal prices fell 26% over the month, to close at US$314/MT, largely due to a decline in downstream demand for steel and the Chinese government’s intervention in the coal sector to increase China’s domestic production. The drop in steel demand is largely driven by the faltering Chinese property market in the wake of Evergrande’s financial difficulties. The Chinese government has also intervened in the steel sector to reduce production to alleviate power grid pressures due to the ongoing energy crisis.
• The LNG prices continued its surge due to rising demand in Asia. Prices closed out at US$35.9/MMBtu, representing a 20% increase to the end of November. The surge can be attributed to harsh winter conditions in the northern hemisphere driving supply shortages and depleting gas storages. Geopolitics over the Nord stream 2 pipeline, and a low gas flow from Russia to Europe, is also driving up global LNG prices.
• Crude oil prices began to ease, down 17%, closing at US$69.8/BBL, the biggest monthly fall in 20 months. The rise of the new COVID Omicron variant has renewed demand concerns in coming months, increasing the risk of new waves of lockdowns and renewed uncertainty over the prospects of significant increases in air and auto travel in the short term.

Performance of WA Index and global indices

WA Index movement

Top performers of the month

Western Australian top performers over the past month by growth in market capitalisation

• AVZ Minerals Limited experienced a strong 94% increase in market capitalisation in November. The company owns 75% of the Manono LCT (lithium, caesium and tantalum) Project, and has the eye of many investors, with Morningstar updating its share price valuation target off the surge in demand for lithium-related products and price increases for the commodity during the month.
• Chalice Mining Limited saw a 50% lift in market capitalisation, following the announcement of its maiden mineral resource at the Gonneville deposit within its Julimar project in Western Australia. The company announced it to be the largest global discovery of nickel sulphide since 2000, earning investors’ confidence in the Project.
• Australian Strategic Materials Limited saw a significant 26% growth in market capitalisation over the November period, following the announcement of the commissioning of its Korean metals plant, the next steps of which involve construction and installation of additional modules, and full scale expected to be completed in the second half of 2022.

The top Deloitte WA Index Movers and Shakers in November were:

• Vection Technologies Limited’s market capitalisation soared 141% in November. The company released an operational update, with a focus on Virtual Reality (VR), noting attractive sales growth and global expansion opportunities. Two enterprise sales and total contract value (TCV) status updates were also provided during the month, demonstrating continued strong performance and securing of contractual revenue.
• Prospect Resources Limited delivered 64% in market capitalisation growth, with an announcement on its strategic partnership process for its Arcadia Lithium Project in Zimbabwe. While there is some uncertainty about a transaction eventuating, both Prospect Resources and its investors remain confident in further positive news.
• Pantoro Limited’s market capitalisation leapt 50% during the month, thanks to its announcement regarding positive drilling results at the Lamboo Platinum Group Element (PGE) Deposit in Western Australia.

If you don’t currently receive our WA Index, you can register to be added to our distribution list.

If you have any questions in relation to the Deloitte WA Index please contact Dave Andrews.