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WA Index

Issue 220 | October 2023

Welcome to the 220th edition of the Deloitte WA Index, a monthly review of Western Australian stocks and indices

The aggregate market capitalisation of Western Australian listed companies declined significantly during September – tumbling 3.2% to close at $357.2 billion. All tracked indices, bar the FTSE 100, experienced weakness this month. The FTSE 100 outperformed other tracked indices as the European Central Bank pointing to an end in its monetary tightening cycle.

Download the list of WA’s top 100 listed companies, as of 30 September 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 September, commodity pricing exhibited mixed trends across key markets. For the second month in a row, energy commodities experienced the most notable surges with Uranium being the standout performer for the period, up 20%.

Similar to the prior month, metals faced slowed movement amid weakening demand due further uncertainties around China’s stimulus measures; nickel, tin and silver slowed, with lithium carbonate experiencing another significant decrease, this month falling 39%. 

Uranium prices rose 20% in September to $70/LB, reaching the highest price since 2011. With the increased concerns over climate change there has been a global shift to cleaner sources of energy, such as uranium. This has resulted in the construction of nuclear reactors in many countries around the world. With approximately 30 new nuclear reactors to be built by China and India alone between 2023 and 2027.

Coking coal prices climbed 13% to US$295/T. The increase is largely driven by the limited supply of Australian, high-quality coking coal, as well as China’s recent assessment of safety policies at their own domestic coal mines impacting internal supply. The market expects that the Chinese government may relax safety inspections at domestic coal mines in the second half of October.

LNG prices rose 11% to US$15/MMBtu which is largely attributable to Chevron being unable to reach agreements with Australian labour unions and increasing demand across both Europe and Asia. The unions have taken steps toward strike action at Chevron’s Gorgon and Wheatstone LNG sites and if they go ahead, with potential for as much as 10% of global LNG production to be shutdown. Europe is on track to be a leading importer as it strains to fill the gap left by Russian pipeline shutdowns, and import capacity across hubs such as China, India and Vietnam increase rapidly.

Crude Oil prices rose 10% to US$96/BBL global oil leaders Saudi Arabia and Russia committed to extending their combined 1.3 million barrel per day cuts until the end of 2023. The rise is also due to high Demand during September which is primarily a result of strong US economic growth and the sharp rise in transportation fuel consumption in China, as domestic services and travel industries rebound from covid-19 era slumps.  

Lithium Carbonate prices fell 39% to $27/KG, as a result of a change in the supply- demand balances. This drop in price is partly to it’s the commodities use in consumer electronics and electric vehicles -sudden changes in consumer trends result in sudden shifts in lithium prices. This has occurred in the second half of 2023, with the demand for electric vehicles in China slowing down in conjunction with the Chinese economy. 

Performance of WA Index and Global indices

WA Index movement

Top 20 performers of the month

Boss Energy Limited (ASX: BOE) experienced the most significant increase in market capitalisation among the top 20 WA listed companies during the month of September. The company’s market capitalisation rose by 39.8%, closing at $1,712m. This largely due to the strong infill drilling results at the Gould’s Dam deposit at its Honeymoon Uranium Project. The company noted that these strong results have resulted in the company initiating technical and economic studies on the Gould’s Dam deposit.

Paladin Energy Ltd (ASX: PDN) saw a market capitalisation increase of 30.2%, which was driven by the strong uranium market, reaching a top of $70 per pound in September 2023, driven by its increasing popularity as a renewable energy resource. The company also release a presentation highlighting the company’s path to production as well as its portfolio of growth projects.

Liontown Resources Ltd (ASX: LTR) closed out the month with an 8.1% increase in market capitalisation, at $6,475m, owing to the revised proposal from Albemarle to acquire all the ordinary shares outstanding in Liontown for $3 per share. Shortly after this announcement, Gina Rinehart emerged as a substantial shareholder in the company.

The top Deloitte WA Index Movers and Shakers in September

Deep Yellow Limited (ASX: DYL) experienced an increase of 48.7% in its market capitalisation, closing the month at $997m off the back of the rally in uranium prices. Additionally, mid-September saw the company release favourable resource expansion drilling results for its flagship Tumas project with results supporting a +30-year mine life.

Bannerman Energy Ltd (ASX: BMN) increased its market capitalisation $129m during the month of September, representing a 43.9% surge. Like DYL, BMN’s surge in market capitalisation is largely due to the recent rally and forecast sustained high prices of Uranium. Further progress on BMN’s Etango project is on track with an announcement from the company detailing Front End Engineering and Design of the Project is progressing in line with plan and budget.

Spartan Resources Ltd (ASX: SPR) concluded the month of September with a market capitalisation of $355m, an increase of 35%. The increase is a result of a favourable exploration update regarding SPR’s 100% owned Dalgaranga Gold Project. Per the update, more high-grade assays were received from the Never Never Gold Deposit, further supporting the strong potential of the target. Further, the company announced the Dalgaranga project is due for an updated mineral resource and reserve statement in the December quarter of 2023.

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