WA Index

Issue 222 | December 2023

Welcome to the 222^nd edition of the Deloitte WA Index, a monthly review of Western Australian stocks and indices

Author:

Dave Andrews

Download the list of WA’s top 100 listed companies, as of 30 November 2023

643 KB PDF

The aggregate market capitalisation of Western Australian listed companies stabilised during November – gaining 2.6% to close at $355.1 billion. All tracked indices experienced growth this month, led by strong performances for US S&P 500 and Nikkei.

Download the list of WA’s top 100 listed companies, as of 31 October 2023, 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

During November, commodity pricing exhibited mixed trends across key markets. Energy commodities have experienced a slight drop after notable surges for three months in a row.

Similar to the prior month, metals faced slowed movement amid weakening demand due to uncertainties around China’s stimulus measures; nickel, lead and aluminium slowed, with lithium carbonate experiencing another significant decrease, this month falling 32%.

Iron Ore

The iron ore price rose 8% to $132/T during November, driven by stimulus measures in China. Additionally, the Dalian futures market for January reflects a further increase to US$136 per tonne, indicating a sustained upward trend, further supported by analysts projecting a potential rise to US$150 in 2024.

LNG

LNG decreased 9% in November 2023 to US$16/MMBtu, following a 21% rise in the prior month of October. This drop is largely attributed to decreased demand for LNG in Asia due to a lack of underground storage capacity. However, the decrease is offset by European countries who have ramped up LNG imports since the shutdown of Russian pipelines, and in addition, import capacity expected to continue to grow rapidly with new regasification terminals opening in Northern Europe.

Lithium carbonate

Lithium carbonate fell 32% to US$16/KG as a result of Chinese lithium carbonate prices drifting lower amid ongoing bearish sentiment and limited demand. Lithium carbonate prices have decreased by 50% in the last 6 months in China. Weak electric vehicle sales have led to high stockpiles and a decrease in the lithium prices. The overcapacity in the energy storage sector has seen eroded margins, adversely affecting prices.

Crude Oil

In November, Brent Crude prices fell by 9% to $81 per barrel, attributed to eased fears of supply disruption in the Middle East. Concurrently, the postponement of the OPEC+ meeting, with the organisation looking to iron out differences in production targets for African producers provided further downward pressure.

Nickel

Nickel prices fell 8%, dropping from US$17,903 to US$16,438 per tonne, continuing the year-long downward trend. Oversupply of Nickel persists despite its importance in various industries, particularly battery manufacturing. This ongoing oversupply remains a key factor pressuring the commodity price throughout 2023.

Uranium

In November, uranium recorded a 9% increase, climbing from $74 to $81 USD per pound, hitting a 15-year high. This upward trajectory marked an extension of the sustained price growth seen throughout 2023. The surge in uranium prices is closely linked to a global shift towards cleaner and more sustainable energy sources, as countries look to reduce carbon emissions and transition to low-emission power generation. Increasing interest in nuclear power and supply disruptions are other contributing factors to the increase.

Performance of WA Index and Global indices

WA Index movement

Top 20 performers of the month

Genesis Minerals Limited (ASX:GMD) experienced the most significant increase in market capitalisation in the top 20 WA listed companies during the month. The company’s market capitalisation rose 28.2%, closing at $2,006m. During the month, Genesis has announced the off-market acquisition of Dacian Gold Limited (ASX:DCN) and is proceeding with post-bid compulsory acquisition of all remaining shares not initially accepted in the takeover offer.

De Grey Mining Ltd (ASX:DEG) saw a further market capitalisation increase of 18.0% during the month, following an increase of 23.5% in the prior month of October. De Grey released a highly encouraging DFS at Hemi gold discovery, forecasting an average annual gold production of 530,000oz over the first 10 years for pre-tax free cashflow of $6.3 billion. First gold is expected in H2 2026.

Perseus Mining Limited (ASX:PRU) closed out the month with a 13.2% increase in market capitalisation, increasing to $2,650m. Perseus Mining has utilised a portion of its US$600 million cash reserve to acquire a significant stake in OreCorp, a competing African mining company, to block a bid from Canadian firm Silvercorp. Perseus now holds 19.9% of OreCorp.

The top Deloitte WA Index Movers and Shakers in September

Strickland Metals Limited (ASX: STK) saw a market capitalisation increase of $133m in November, representing an increase of 79.3% from the prior month. Strickland this month had promising gold drills at its Marwari site, including 31m at 5.6 grams per tonne, with further RC drilling announced throughout the month.

Pantoro Limited (ASX: PNR) market capitalisation climbed by $109m in November, representing an increase of 65.6% on October numbers. Announced in November included the binding agreement to sell lithium and base metal rights at its Norseman project to Mineral Resources for $60m. Included in the consideration was $30m cash, a deferred payment of $30m upon the announcement of the final investment decisions, and net smelter and lithium use royalties.

PYC Therapeutics Limited (ASX: PYC) rose 64.9% in November, raising its market capitalisation by $138m from October. The main growth came on the back of announcements relating to ongoing medicinal trials. Notable updates on these trials include the completion of dosing in a second patient cohort with a blinding eye disease, and the development of a drug candidate for patients with end stage renal failure, showing efficacy in human models.

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