WA Index

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WA Index

Issue 196 | December 2020

Welcome to the 196th edition of the Deloitte WA Index, a monthly review of Western Australian stocks and indices.

The market capitalisation of Western Australian listed companies climbed 7.6% over the month of November to close at $239.5 billion. Global Indices grew even more sharply, lifted by COVID-19 vaccine breakthroughs and stimulus hopes across the globe.

Download the list of WA’s top 100 listed companies, as of 30 November 2020, explore the sections below and if you do not currently receive our WA Index,  please register to be added to our distribution list.

Highlights:

If you have any questions in relation to the Deloitte WA Index please contact Dave Andrews.

As of 30 November 2020

Commodity review

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  • Crude Oil prices soared by 28% this month, closing at US$47/BBL. The positive outlook on potential approvals of vaccines across the world for the COVID-19 epidemic have pushed brent crude oil prices to its highest since the outbreak in March. In anticipation for the easing of COVID-19 restrictions and reopening of major economies, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, have already begun discussions with respect to increasing oil output and production in the upcoming year to meet the growing demand.
  • The news of developing vaccines have, however, placed Gold in a bearish market, sending its price tumbling to US$1,763/tonne, representing a four-month low. With hopes of the vaccines being successful, there will be less reliance placed upon a stimulus to contribute to and accelerate the restoration of economies. Traditionally, the gold market has always been a safe haven for investors in times of crisis but as the global economy recovers with the introduction of new vaccines, investors are now rebalancing exposures.
  • Copper prices have risen from the after-effects of the COVID-19 pandemic, up approximately 70% since March to close at US$7,569/MT. The recovering global economy, especially the Chinese market which accounts for about 40% of the world’s copper consumption, and the successes of vaccines have resulted in this price rise. Particular optimism of the market revolved around President-elect Joe Biden’s push for his ‘Clean Energy Revolution’ campaign to spend billions on renewable energy, especially on copper-intensive products such as solar panels. The launch of a new contract for international investors to trade copper on the Shanghai International Stock Exchange has also attributed to this change and remains a market to watch in the future.
  • Coal prices increased by 12% over the month of November to close at US$70/MT, despite the unofficial ban on coal imports, amongst other things, from Australia by the Chinese government. The unofficial ban will likely lead China to seek alternative sources to satisfy the nation’s consumption of coal elsewhere, leading to a bullish market for those alternatives. As a consequence of alternative sources of coal such as in South Africa becoming more expensive, the global prices of thermal coal has also been brought up concurrently in the market.
  • Iron Ore demands from China were at a record-high and remains undeterred by the tension between both the Australian and Chinese government. With prices closing 11% higher at US$132/tonne, exports of steel iron ore have surpassed even demands of the same month last year as a result of post-COVID-19 resurgence of the Chinese economy, in particular with the Lunar Chinese New Year fast approaching.
  • The Zinc market closed on a positive note over the month of November at $2,776/tonne, a tenth of an increase from the previous period. The recent shutdown of a major zinc mine in Gamsberg, South Africa, has led to a further deficit of zinc supplies in the market. Like other commodities, the zinc market has once again turned to the recovering Chinese economy, where the overwhelming demand in comparison to the availability of supply has caused the rise in zinc prices.

Performance of WA Index and global indices

Performance of WA Index and global indices
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WA Index movement

WA Index movement
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Top performers of the month

Western Australian top performers over the past month by growth in market capitalisation

  • The market capitalisation of Pilbara Minerals Limited increased by 69% over the month of November, following the company’s September 2020 Quarterly Activities Report and announcement of conditional agreement to acquire Altura Lithium Corporation. Although lithium prices remain low, as a result of an increase in government funding, easing of the COVID-19 restrictions and newly-elected President Joe Biden’s plans for a ‘clean energy revolution’, the company was able to close the month at more than $1.5b.
  • Chalice Gold Mines Limited showed market capitalisation growth of 50% in November. This was after the announcement that three key private properties have been secured at the Julimar Project for consideration of $7 million in cash and more than 2.3 million fully-paid shares. The Julimar Project has been reported to produce high-grade PGE-Cu-Au (platinum group elements, copper and gold) deposits. The million-dollar deal will further mitigate risks associated with future mining operations.
  • Monadelphous Group Limited's market capitalisation climbed 40% more than in the month of November, following an update released by the company containing the confirmation of securing two large contracts with mining giants, Rio Tinto and BHP. It is estimated the contracts, involving various works such as maintenance services and non-process infrastructure projects, are valued at approximately $60 million.

Major index players in november 2019
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The top Deloitte WA Index Movers and Shakers in November were:

  • Azure Minerals Limited's market capitalisation more than doubled, jumping 152% in the month of November. This was after the announcement that assays from the Andover Nickel-Copper Project reported evidence of an abundance in high grade nickel and copper sulphides. Following the successful report with respect to the first three diamond drill holes, a subsequent report also highlighted the significant discovery of sulphides at the fourth drill hole, further increasing the value and prospects of the project.
  • Element 25 Limited released a development update on their Butcherbird Manganese Project, which resulted in its market capitalisation soaring 80% through November. The update featured the appointment of a mining contractor and resident manager to oversee the accelerated operations of the Butcherbird mine. The low cost and capital of the project, valued at less than $15 million, will allow for the development to be completed expeditiously, with the first production from the site scheduled for the next quarter in 2021.
  • Vulcan Energy Resources Limited's market capitalisation had an overwhelming increase of 94%, closing at $177m. This growth was on the back of an announcement with respect to an upgrade of its Germany-based lithium project. Upon the granting of the Taro Exploration Licence to Global Geothermal Holding UG (GGH) in August, Vulcan initially made an agreement with GGH to acquire 51% of the interest in the exploration licence. The update has announced Vulcan’s intention to increase its total interest to 80% by expending another $800,000 over the next two years into the project.

Top performers of the month
Select above image to enhance the Top performers of the month

If you don’t currently receive our WA Index, you can register to be added to our distribution list.

If you have any questions in relation to the Deloitte WA Index please contact Dave Andrews.

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