Welcome to The State of the Deal including the 192nd edition of the Deloitte Queensland Index, a review of Queensland listed companies on the Australian Securities Exchange (ASX).
Russia’s invasion of Ukraine and the historic coordinated sanctions which swiftly followed from the West, drove significant volatility across global capital markets in Q1 2022, with soaring commodity prices and ongoing supply chain disruptions contributing to a further surge in inflation. Amidst this uncertain backdrop, Queensland equities largely held their ground, with the Deloitte Queensland Index declining by 1.6% in Q1, with the total market capitalisation of QLD-based ASX-listed companies decreasing to $121.8b at 31 March 2022 (down from $124.1b at 31 December 2021).
Notwithstanding the slight decline in Q1 2022, the Deloitte Queensland Index rose by 26.9% in the 12 months to 31 March 2022, significantly outperforming the S&P/ASX All Ordinaries (up 11.0%), and continuing to exceed pre-pandemic levels.
Following a record-breaking year for M&A in 2021, global M&A activity experienced a relatively slow start to 2022, with the escalating conflict in Ukraine and fears of runaway inflation impacting business sentiment, fuelling uncertainty amongst dealmakers. At its close, Q1 2022 saw Queensland deal volumes and values decrease by 13% and 31% respectively compared to Q1 2021.
Our Queensland Economic Update also considers the potential implications to the Queensland economy from the ongoing conflict in Europe, as well as the impact of growing inflationary pressures and rising interest rates on both Queensland businesses and household consumption.