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Deloitte SA Index outperforms ASX 200 in September quarter 2016

Strengthened commodity prices spur upward trend in South Australian energy and resources companies

24 November 2016: The Deloitte South Australian (SA) Index increased by 6.0% in the 2016 September quarter, outperforming the ASX 200 for the same quarter, which saw a 3.9% increase.

The total market capitalisation of the state’s 65 listed companies increased by $662 million (2.67%), from $24.79 billion to $25.45 billion.

Deloitte Financial Advisory’s South Australia lead partner Stephen Adams said: “Both indices performed well in July but recorded moderate falls in August, whilst September remained relatively flat”.

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Percentage change to 30 June 2016
Percentage change to 30 September 2016

In February this year, global supply pressures and strengthening demand led commodity prices to begin an upwards trend. As a result, many of South Australia’s Energy & Resources (E&R) companies have achieved positive share price growth over the September quarter, with E&R companies accounting for eight of the top ten performers (by share price) in the Deloitte SA Index.

The table below provides a list of the eight top performing E&R companies by share price in the Deloitte SA Index.

The table below provides a sample of reverse takeovers involving South Australian companies.
Source: Deloitte analysis, ASX, Capital IQ

Adams said: “South Australian E&R companies have seized the opportunity presented by strengthened share prices to source capital through equity raisings in the secondary market. These capital raisings have been utilised to fund acquisitions as well as replenish cash positions that were previously under pressure”.

“We anticipate that the strong share prices and capital injections in South Australia’s E&R industry will continue to spur increased investment activity by South Australian E&R companies in the short to mid-term.” Adams said.                   

The table below provides a sample of top performing Deloitte SA Index E&R companies who have recently performed capital raisings.

The table below provides a sample of reverse takeovers involving South Australian companies.
Source: Deloitte analysis, ASX, Capital IQ

Major South Australian ASX listed company movements

Mayne Pharma Limited was the biggest positive contributor to the Index for the September quarter, with its share price increasing by 5.0%, and market capitalisation to $2.98bn.

On an absolute share price performance basis, the companies that recorded the largest percentage share price increases for the three months to 30 September 2016 were:

  • Core Exploration Limited, which increased 290.9%  from $0.02 per share to $0.09 per share
  • Minotaur Exploration Limited, which increased 117.7% from $0.06 per share to $0.14 per share
  • Havilah Resources NL, which increased 97.3% from $0.37 per share to $0.73 per share.

Duxton Water Limited entered the index in the September 2016 quarter via an initial public offering.

Duxton Water intends to provide investors with exposure to Australia’s water entitlements market. The majority of Duxton Water’s assets will be water entitlement leases with primary producers.

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