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Deloitte SA Index outperforms ASX 200 in June quarter 2016

Reverse takeovers complement structural transition in South Australia

25 August 2016: The Deloitte South Australian (SA) Index increased by 3.5% in the 2016 June quarter,  outperforming the ASX 200 for the same quarter, which saw a 3.0% increase.

The total market capitalisation of the state’s 64 listed companies increased by $1.73 billion (7.5%), from $23.06 billion to $24.79 billion.

Deloitte Financial Advisory’s South Australia lead partner Stephen Adams said: “Both indices performed well in April and May before recording declines in June in line with global markets.”

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

Throughout the 12 months to 30 June 2016, a number of South Australian listed companies have entered and exited the Deloitte SA Index via reverse takeover.  The trend is underpinned by sustained declines in global resource markets that have resulted in reduced mining investment and prompted a tilting of capital to momentum sectors such as food, healthcare and technology. 

Adams said: “We anticipate reverse takeovers will continue to be a viable option for aspiring ASX companies, as the relevant pools of capital continue to provide strong valuation support for companies exposed to Australia’s next waves of growth, namely agribusiness, tourism and international education.”

The table below provides a sample of reverse takeovers involving South Australian companies.
The table above provides a sample of reverse takeovers involving South Australian companies.

“It’s expected that changes in South Australia’s current economic composition will reflect the state’s relative competitive advantage in the next and future waves of growth, offsetting declines in manufacturing and providing an environment for which innovative South Australian companies can attract capital for expansion,” Adams said.

Major South Australian ASX listed company movements

Adelaide Brighton Limited was the biggest positive contributor to the Index with its share price increasing by 9.9%, and market capitalisation to $3.62bn.

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

  • Pepinnini Minerals Limited, which increased by 342.9%, from $0.007 per share to $0.031 per share
  • Magnetite Mines Limited, which increased by 187.5%, from $0.016 per share to $0.046 per share
  • Flinders Mines Limited, which increased by 100%, from $0.013 per share to $0.026 per share.

Companies that recorded the largest percentage share price decreases were:

  • Petratherm Limited – down 42.9% (market capitalisation of $3.1m)
  • Sundance Energy Australia Limited – down 41.2% (market capitalisation of $62.7m)
  • Core Exploration Limited – down 35.3% (market capitalisation of $5.96m).

There were no new companies added to the Index in the June 2016 quarter, and one, iBosses Corporation Limited, left with a change of registered office to Victoria.

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