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WA Index

Issue 225 | April 2024

Welcome to the 225th edition of the Deloitte WA Index, a monthly review of Western Australian stocks and indices.

The aggregate market capitalisation of Western Australian listed companies increased by 2.5% during the month of March to close at $381.6 billion. The WA Index rose due to its strong correlation to the commodities market, with gold stocks the leading driver for the increase in the Index this month.

The tracked indices increased alongside the WA market, led by a 4.2% growth by the FTSE 100 and the S&P 500 registering a rise of 2.9%. The biggest influences on the FTSE 100 were multinational retailers Kingfisher, M&S and JD Sports, and the S&P 500 rise was largely influenced by semiconductors to power artificial intelligence, including Nvidia.

Download the list of WA’s top 100 listed companies, as of 31 March 2024, explore the sections below, and if you do not currently receive our WA Index, please register to be added to our distribution list.

Commodity review

Commodity markets experienced mixed trends in   the first quarter of 2024. Despite metals encountering hurdles from US inflation and a brief decline in Chinese manufacturing linked to the Lunar New Year, positive sentiments arose due to projected advancements in AI, electric vehicle manufacturing, and renewable energy sectors. 

The price of LNG surged to US$9.535/MMBtu, experiencing a 14% gain during March. This was driven by demand in countries like China, India, and Thailand. This surge in imports was spurred by competitive prices, with Asian LNG prices near a three-year low due to ample supply and mild winter weather, making it a cost-effective alternative to other fossil fuels, and incentivizing purchases from price-sensitive employers. 

The price of Gold increased by 8% to US$2,214/oz in March, reaching an all-time high following indication from the US Federal Reserve anticipating an interest rate cut of 0.75% by the end of 2024 as signals continue to suggest inflation is coming under control.

Volatility in Nickel continued to pave uncertainty for local WA producers and smelters. Whilst February saw prices up 11%, prices lowered in March by 6% to $16,658/T. Indonesian Nickel-Laterite continues to grow in production, with signals suggesting continued intent in the future to continue increasing production from the region.

The price of iron ore decreased 12% to close at US$249/T. Overall supply has outpaced demand, leading to a significant drop in the price of iron ore, reaching their lowest levels since May 2023, despite some economic incentives introduced by the Chinese government to stimulate construction. This decline is attributed to slowed demand in China, environmental restrictions impacting steel production, increased activity from Brazil, and a surge in iron ore supplies from Australia.

Coking Coal dropped by US$57/T to close at US$249/T, marking a 19% decline in the month; with generally warmer than expected weather in China. Despite falling prices, Australian coal remains relatively expensive for Chinese buyers. The market is affected by increased supply, reduced steel demand, and production challenges due to mine emergencies – leading to increase production stoppages and supply constraints. 

Performance of WA Index and Global indices

Top 20 performers of the month: 

Ramelius Resources Ltd (ASX: RMS) saw its market capitalisation increase by 28.9%. The movement was volatile through the month - following reaction to a potential transaction with Karora Resources Inc. Additionally, RMS presented its 10-year Mine Plan for Mt. Magnet, and early performance indicators for Q2 of the calendar . The update provided greater clarity on gold production expectations and operating cost estimates, which the market viewed favorably.

Bellevue Gold Ltd (ASX: BGL) Market capitalisation increased by 23.2% during the month. The main influence for this increase was the reported half-year results which were released mid-March, and February physicals showing production ramp-up has continued with little disruption. This is coupled with continued growth in the gold price through the month.

Perseus Mining Ltd (ASX: PRU) were also positively impacted by gold price increases, as it saw its market capitalisation increase by 22.5%. PRU also announced an updated takeover bid to acquire 100% of Orecorp Limited (ASX: ORR),  increasing the offer from $1.87 per share to $2.07per share. Subsequent to the updated bid, Orecorp endorsed the revised offer.

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

Firefly Metals Ltd (ASX: FFM) market capitalisation increased 48.7% during the month of March, along with the copper commodity increase. The increase was largely attributable to a $52 mil capital raise to continue drilling out the Green Bay Copper-Gold Project. Drilling results were strong in the month, including 3.4% CuEq @ 22.8m, suggesting continued mineralization beyond the existing resource. The project also secured a port access agreement following the strong drilling results, suggesting greater copper production is closer than initially anticipated by the market.

Pantoro Ltd (ASX: PNR) is another gold producer that saw its market capitalisation increase by 34.9%. PNR successfully implemented a revised mining plan in February 2024 which resulted in free cashflow generation  . In mid-March, the operation projected an improved cash-generating result for the month, boosting the market sentiment, as revenue for the half-year to December 2023 more than doubled from $45m to $93m.

Australian Strategic Materials Ltd (ASX: ASM) increased in market capitalisation by 29.0%. The biggest influence on this was the Export-Import Bank of the United States (US EXIM) non-binding and conditional letter of interest to ASM worth US$600m. The prospect of funding support serves as a catalyst for strengthening attention on both customer engagement and financing initiatives in North America. Overall, this instilled confidence in ASM, resulting in a positive drive in its share price. 

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