The State of the Deal and the Deloitte Queensland Index – Q2 2024
August 2024
Welcome to The State of the Deal, featuring the latest 201st edition of the Deloitte Queensland Index, an analysis of Queensland-listed companies on the Australian Securities Exchange (ASX).
In a time when domestic political and economic uncertainty continues to influence deals, the Deloitte Queensland Index experienced a return of negative 2.4% in Q2 2024 compared to the negative 1.7% return of both the S&P/ASX All Ordinaries and Dow Jones Industrial Average, negative 1.9% of the Nikkei 225 and positive returns of 2.7% and 7.1% for the FTSE 100 and Hang Seng.
The performance of the Index reflects the impact of a range of national and Queensland specific factors. With cost-of-living pressures at the forefront for many Australians, the Federal Budget included several key initiatives to deliver relief whilst keeping pressure off inflation and supporting sustainable economic growth. This included tax cuts, energy bill relief, changes to student debt indexation and increases to Commonwealth Rent Assistance. Year-on-year inflation to Jun-24 came in at 3.8%, consistent with the RBA’s forecast and marginally higher than 3.6% in the year to March 2024.
Interest rates remained steady from Mar-24 to Jun-24, as did the cash rate. The unemployment rate increased slightly from 3.9% to 4.0%, the highest level in two years. This aligned with RBA’s forecasts, demonstrating that monetary policy appears to be having the intended impact on the Australian Economy.
Local to Queensland, the 2024-25 State Budget handed down support measures in addition to the Federal Budget, including 50 cent fares across public transport, discounts on vehicle registration, additional electricity bill support and extended eligibility for the first home concession.
Our Queensland Economic Update explores the key drivers of Queensland’s economy in the second quarter of 2024. Household consumption growth outpaced the national rate in the March 2024 quarter, spurred by increased spending on discretionary services which indicates a positive trend in consumer confidence and economic recovery. Queensland's population experienced a growth rate of 2.6% in 2023, slightly outpacing the national growth rate, however, there has been a downward trend in new dwelling approvals in the state.
Key highlights from the Q2 2024 report include:
- The Deloitte Queensland Index: comprised of 155 companies experienced a 2.4% decrease in Q2 2024 compared to a 1.7% decrease in the S&P/ASX All Ordinaries. Total market capitalisation of Queensland-based ASX listed companies declined to $118.9b at 30 June 2024 compared to $121.8b at 31 March 2024.
- Sector mix: compared to 31 March 2024, the composition of the Index as at 30 June 2024 has shifted towards Financials, Energy & Resources and Technology, Media, and Telecom, offset by a reduced share in Consumer, Industrials and Real Estate.
- M&A volume in Queensland: increased by 10% from 115 deals in 2H 2023 to 127 deals in H1 2024. The volume of deals by QLD-based ASX companies increased to 35 in H1 2024 with a disclosed value of $1.3b, up from 24 transaction with a disclosed value of $1.0b in H2 2023.
- Our recent 7th edition of Deal in Focus: Heads of M&A Survey revealed Australia and New Zealand M&A leaders are surprisingly bullish compared to the prior year, with a greater share of respondents expecting a rise in deal activity believing that current conditions are favourable to M&A.
Previous editions:
