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The State of the Deal and Deloitte Queensland Index - Q2 2023

September 2023

Welcome to The State of the Deal including the 197th edition of the Deloitte Queensland Index, a review of Queensland listed companies on the Australian Securities Exchange (ASX).

The outlook for further monetary policy tightening continued to be one of the key points of interest for investors during Q2 2023, as central banks continued to consider further interest rate hikes to combat inflation amidst a challenging and uncertain economic outlook. Notwithstanding, many economies continue to prove more resilient than expected, with the Deloitte Queensland Index experiencing a slight increase in Q2 2023, with the total market capitalisation of QLD-based ASX listed companies growing by 1.0%.

Our Queensland Economic Update explores the key drivers of Queensland’s economy in the second quarter of 2023, including increased export volumes of the State’s natural commodities despite prices for both thermal coal and metallurgical coal declining – albeit remaining above historical levels. Within this edition we also consider the impact of tightening monetary policy, with the prospect of continued contraction in household consumption impacting business confidence, with the latter reducing to its lowest level since September 2020.

Key highlights from the Q2 2023 report include:

  • The Deloitte Queensland Index grew by 1.0% in Q2 2023: The total market capitalisation of QLD-based ASX listed companies growing by 1.0% from $119.4b at 31 March 2023 to $121.1b at 30 June 2023. In the 12 months leading up to June 2023, the Deloitte Queensland Index increased by 9.3%, however was outperformed by the S&P/ASX All Ordinaries Index, which recorded a 9.7% rise over the same period.
  • Tilt in favour of the TMT sector: Growth in the Deloitte Queensland Index in Q2 2023 was primarily driven by the strong performance of the Queensland TMT sector, which collectively reported a $2.4b increase in market capitalisation, led by NEXTDC Limited (NXT) which grew by $1.7b following the announcement of large contract wins and regional expansion through new data centre developments in Malaysia and New Zealand. 
  • Queensland M&A activity incrementally improved in Q2 2023: Queensland M&A Activity has improved slightly in 1H 2023 as compared to 1H 2022, with slightly greater deal volume and significantly higher deal values transacted. However, 1H 2023 has been relatively subdued compared to 2H 2022, that experienced significant rises in deal volume and value transacted. There was an announced deal value totalling $8.7b, reflecting an 11% decline compared to 2H 2022, yet is a 172% increase on 1H 2022.

Previous editions:

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