core sector communique

Deloitte WA Index up 18.8% for 09/10 financial year

 

Despite declines for the last three months of the financial year, the Deloitte WA Index increase by 18.8% or $22.5bn for the year ended 30 June 2010.

 

For the month of June, the market capitalisation of Western Australian listed companies which comprise the Deloitte WA Index decreased by $2.9bn, finishing the financial year at $140.9bn.

 

It was the third successive month of decline for the Deloitte WA Index, which was again led down by declines in the mining and oil and gas sectors.  

 

“The demand for commodities has been subdued in the past month with concerns over China’s economic growth, Europe’s sovereign debt issues and investors evaluating the possible effects of RSPT in Australia,” Mr Jones, Managing Partner for Deloitte Western Australia stated.

 

The market price of all commodities surveyed declined in June, with Zinc down by 7.61% followed by Nickel (7.51%), Copper (6.18%) and Lead (5.37%). The fall in commodity prices was largely driven by disappointing economic information released during the month which raised fears that the global economic recovery may be faltering.  In contrast, the price of Gold increased by 2.13% over the month.

 

All major world indices declined during the month of June. The FTSE 100 suffered the most, down 4.7%, closely followed by the US S&P 500, which fell by 4.2% and the Nikkei, down 4.0%. The decline in Australian companies was comparatively modest, with the All Ordinaries falling by 2.9%.

 

The ‘Movers and Shakers’ for the month of June include Avoca Resources Limited, Coalspur Mines Limited and Perseus Mining Limited, with the market capitalisation of each company increasing by 33.0%, 28.2% and 28.1% respectively.

 

The market capitalisation of Avoca Resources Limited jumped by $197.4m in June to close at $794.8m. This increase follows the announcement of an upgrade to the ore resource (to 1.57 million oz) and ore reserve (to 803,000oz) at Avoca’s Higginsville Gold Project. This represented a reserve increase of 38% and a resource increase of 5% from the previously published pre-mined reserve results.

 

Coalspur Mines Limited recorded a $66.8m increase in market capitalisation to finish the financial year at $303.9m. This followed the acquisition of new coal leases neighbouring Coalspur’s existing Hinton Coal Project. The acquisition has the potential to be developed into one of the largest thermal coal mines in North America and has increased Coalspur’s combined coal resource to over 900 million tonnes of low sulphur thermal coal.

 

The market capitalisation of Perseus Mining Limited increased by $210.8m, and closed at $960.0m for the month of June. The increase was driven by an announcement of the commencement of site works at the Central Ashanti Gold Project in Ghana, signalling the beginning of mine construction and moving a step closer to production.