WA Index

Issue 223 | February 2024

Welcome to the 223^rd 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 31 January 2024

644 KB PDF

The aggregate market capitalisation of Western Australian listed companies contracted during January – decreasing 3.2% to close at $357.2 billion. The WA Index struggled in January due to its strong correlation to the commodities market. Commodities such as uranium provided some optimism in the largely dull, commodity heavy index. Opposingly, the majority of tracked indices experienced growth this month, led by a strong performance by Nikkei, registering a gain of 8.4% over the month, driven by shippers and financials, a reduction in US bond yields and exchange rate stability. The FTSE 100 was the only key index deteriorating over the month, down 1.3%.

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

During January, commodity pricing exhibited mixed trends across key markets. Uranium continues to surge whilst other key resources saw a tougher start to the year.

Uranium

Uranium closed at US$100/LB, up 10% for the month and continuing its price surge into 2024. This comes as fears loom over future shortages of the commodity with Kazatomprom, the world’s largest producer of uranium stoking market skepticism on whether their production goals can be achieved. The US government has also added support to domestic production plants to reduce reliance on Russia as a supplier.

Iron Ore

Iron Ore prices declined 7% to US$133/T, brought about by a continuance in the reduction of demand for steel and hence iron ore from China. There was however a late recovery as the PBOC announced a first reserve requirement ratio cut, effective in 2024 increasing liquidity, having a positive impact on demand for iron ore. This has been countered by increasing production from Australia, Brazil and Africa driving prices down further. Current stimulus measures and macro-economic factors in China suggest a positive outlook for demand for steel and iron ore post the Lunar New Year.

Rare Earth (Praseodymium-Neodymium Oxide)

Rare earths were hit hard as 2024 begins, with Praseodymium-Neodymium down 11% in January, falling to US$55,657/T. This comes as a result of a third quota introduced by the Chinese government, resulting in Chinese producers slashing prices of rare earths. The future is uncertain for rare earths as demand remains below levels required to meet future demand forecasts, driven by growth in electric vehicles and renewable energy demand.

LNG

The price for LNG closed at US$10/MMBtu in January, down 17% from the
previous month. The price of LNG fell victim to high storage levels in
Europe and Asia as well as mild weather across the northern hemisphere
which reduced demand for LNG, in spite of geopolitical unrest in the Red
Sea halting LNG deliveries from major producer Qatar.

Coal

Coal prices took a dive in January, down 19% and finishing at a price of
US$118/T. This was due to increased production levels in China and
India as well as large gas stores in Europe and Asia, these two matters
increasing supply and decreasing demand putting downward pressure on
prices.

Performance of WA Index and Global indices

WA Index movement

Top 20 performers of the month

Uranium exploration and development companies dominated the top 20 performers as well as the movers and shakers in January, with many companies benefiting from the rise in uranium prices.

Boss Energy Limited (ASX: BOE) experienced the most significant increase in market capitalisation in the top 20 WA listed companies during the month. The company’s market capitalisation rose 39.5%, closing at $2.276b. This was brought about by several key announcements throughout the month including encouraging drill results from the Honeymoon Uranium project in South Australia.

Paladin Energy Ltd (ASX: PDN) saw a significant rise in market capitalisation within the month of January, rising 31.5% to $3.863b as the market reacted to positive news flow. The company executed a US$150m syndicated debt facility which will provide the company with capital flexibility as they recommence operations at the Langer Heinrich Uranium mine in Namibia. The company also released its positive quarterly results where it noted that first ore feed from the Langer Heinrich mine was processed through the processing plant on 20th of January.

Emerald Resources (ASX: EMR) extended on its rapid growth over the past year, closing at a market capitalisation of $2.088b on 31 January 2024, up 11.2% for the month. Strong exploration results continue at the company’s Bullseye Gold project and Okvau Gold Mine. Quarterly gold production from the company’s Okvau mine impressed the market, with the company noting it is on track to meet gold production guidance. The company continues in its efforts to takeover Bullseye Mining Limited, extending the date for Bullseye shareholders to accept the offer.

The top Deloitte WA Index Movers and Shakers in September

Peninsula Energy Limited (ASX: PEN) saw its market capitalisation more than double in the month of January, up 102.4% for the period. January saw the company complete a share purchase plan and placement. The total proceeds from the SPP and placement amounted to $60m. The funds received will be used to continue construction work and wellfield development to restart production at the Lance Uranium Project.

Bannerman Energy Ltd (ASX: BMN) benefited from the recent positive uranium market sentiment, with its market capitalisation rising to $554.8m as at January 31, up 35.3% for the month. Bannerman released its quarterly activities report which noted strong progress on the company’s Etango Project. The company also announced changes to its Board and key management personnel – with Gavin Chamberlain announced as the Company’s new Chief Executive Officer.

Deep Yellow Limited (ASX: DYL) market capitalisation grew 34% over the month, closing at $1.116b on 31 January 2024. January saw the company issue its December quarterly activities report – this report outlined the significant advancements the company made at its Tumas Uranium Project in Namibia including obtaining a mining license from the Namibian Ministry of Mines and Energy.

Did you find this useful?

Yes

WA Index