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Deloitte Western Australia Index 2020
20-year Anniversary Special Edition
Welcome to this special edition of the Deloitte WA Index. This year the market capitalisation of Western Australian listed entities closed at $202.1 billion, a remarkable result given COVID-19 disruption saw the WA Index at $151.3 billion only three months prior.
A lot happens in 20 years. In both a global context and specifically for our local market, there have been many defining moments that have led us to where we are today.
The WA Index has outperformed broader indices significantly over the last 20 years, and the size and scale of the companies that call Western Australia home are at an all-time high.
This special report looks back on the events and milestones shaping our markets over the past two decades, allowing WA Index participants and investors alike take a moment to reflect on the sustained period of performance for Western Australian companies.
- Looking back at the last 20 years of the Deloitte WA Index we’re lucky to be here. Thankfully the ‘Y2K bug’ did not cripple technology and our monthly index tracking at the turn of the century began. Looking back - A lot happens in 20 years.
- The emergence of technology-led corporations early in the turn of the century saw Mark Zuckerberg start Facebook and Google float in the US. We experienced a global financial crisis in 2008 and then entered a period where geo-political and environmental events shaped global markets.
- Looking to end the decade on a high, investors were no doubt optimistic about what 2020 might bring, although unfortunately for Australia, devastating bushfires followed by a COVID-19 pandemic swiftly sent economies and markets into turmoil.
- Economic volatility often bodes well for gold, the safe-haven choice in times of market uncertainty. Not surprisingly, gold has gone from strength to strength, closing 30 June 2020 at US$1,768/ounce and remains on a positive run. Very few commodities have fared so well this year with oil and gas clearly suffering on global travel restrictions and industrial activity slowdowns.
- A glance at the composition of companies within the WA Index at 30 June 2020 confirms the gold industry is thriving, with data showing 10 gold-focused companies in the WA Index Top 20.
- But the WA Index was not always so gold concentrated. In this 20-year edition, we look back at the WA Index participants over the past 20 years, the diversity of industries represented, and consider whether significant gold exposure in the WA Index today has insulated local investors during recent global events.
- The COVID-19 outbreak saw a very sharp market correction in Australia, and for the WA Index, however, equally as sharp has been the rebound. Have investors already moved on from COVID-19 disruption? Or is there more to come? Can the current WA Index gold exposure assist the WA Index achieve relative outperformance?
Top Movers and Shakers
As is custom for our annual edition of the WA Index we recognise the top three movers in the WA Index top 20, in terms of market capitalisation growth, for the year ended 30 June 2020 – De Grey Mining Limited, Ramelius Resources Limited, and Perseus Mining Limited.
We also recognise the largest three movers of the WA Index top 100, in terms of market capitalisation growth, for the year ended 30 June 2020 Musgrave Minerals Limited, Chalice Gold Mines Limited, and Rox Resources Limited.
In this 20-year special edition, we specifically call out the achievements of three WA Index stalwarts, those WA-based companies that held a top 10 ranking in the WA Index at 30 June 2000 and maintain that position at 30 June 2020. These are Wesfarmers Limited, Woodside Petroleum Limited, and Iluka Resources Limited.
Congratulations to all winners on these wonderful achievements.
- Wesfarmers – The Farmer’s Company – Regularly contesting the top spot on the Deloitte WA Index with Woodside Petroleum over the early part of the century, it was early 2012 that saw Wesfarmers exert itself as the clear WA Index leader, a position it has maintained for 100 consecutive months.
In this special report we shine the spotlight on this WA Index stalwart reflecting on milestones and achievements that has led ‘The Farmer’s Company’ to maintain such an envious position in the Index over the last 20 years.
- All that glitters is gold – Having observed significant gold presence in our local index, and more importantly, within our list of top movers and shakers for the year, we look back over the precious metals pricing journey over the last 20 years and explore how gold has come to be a commodity of choice for our local market.
- COVID-19 and the WA Index –The significance of the COVID-19 pandemic on both our local and broader markets cannot be overlooked. Following the outbreak, the WA Index fell 27% during February and March 2020 as investors came to terms with the significance of what was unfolding.
Share market falls of this scale are seldom seen. Having revisited data for the WA Index over the past 20 years, the most comparable period, albeit on a larger scale, was the Global Financial Crisis (GFC) in 2008. This special edition includes a comparison between the recent COVID-19 market correction and that of the GFC.
View past year issues of the Deloitte WA Index Diggers and Dealers Special Edition:
Published: August 2020