South Australia’s cylinders firing to accelerate economic growth

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South Australia’s cylinders firing to accelerate economic growth

6 June 2017:  The Deloitte South Australian (SA) Index decreased by 3.2% in the June 2017 quarter, outperformed by the S&P/ASX, which decreased by 2.4%. Following an uplift in April, both the S&P/ASX 200 and SA Index experienced declines in May whilst remaining relatively steady in June.

The total market capitalisation of South Australia’s 64 listed companies declined by 10.1% in the June quarter, from $27.96 billion to $25.12 billion.

Santos Limited and Mayne Pharma Group Limited recorded the largest declines in market capitalisation for the June quarter. Santos continues to be affected by sustained declining oil prices as well as uncertainty around proposed changes to domestic gas security policy. Due to potential changes in US prescription medication policy, Mayne Pharma’s share price has endured a steady decline over the last 12 months.

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SA Index percentage change by quarter to 30 June 2017
Source: Deloitte analysis, ASX, Capital IQ

Deloitte’s recent Make It Big Adelaide Report identified eight ‘cylinders’ of growth in the South Australian engine of economic growth – strategic industries where the state has a natural competitive advantage.

Deloitte Financial Advisory Lead Partner, Steve Adams said: “Three of these growth industries – agribusiness, energy and gas, and health and medical industries – are strongly represented by top performers in the June quarter of the SA Index."

“We’ve recognised the strong impact these industries have made to South Australia historically, but more importantly, the potential to leverage they offer to accelerate economic and population growth in our state,” Adams said.

Agribusiness
  • Elders Limited’s share price reached a ten-year high during quarter after posting positive earnings results, acquiring a horticultural service provider, and completing the divestment of its live export logistics business
  • Clean Seas Tuna Limited released positive earnings, upgraded profit forecasts and announced expected expansion into international markets – and enjoyed a 39.4% increase in share price. 
Energy and gas
  • Oil and gas operator Cooper Energy completed a $151 million capital raising to part-fund its Sole Gas Project. Its market capitalisation increased by $189 million in the June quarter.
Health and medical industries
  • Reproductive Health Science Limited, a local developer of single cell genomic technologies saw a share price increase of 106.7% during the quarter after completing a successful capital raising of $1.5 million and announcing positive results from external testing of patented technology on a global stage.

“The top performing businesses profiled in the SA Index exemplify the benefits of strong strategic direction coupled with South Australia’s natural competitive advantage in a national and global market,” Adams said.

Largest positive contributions to the SA Index in the June quarter 2017

Source: Deloitte analysis, ASX, Capital IQ

Largest share price increases in the June 2017 quarter.

Source: Deloitte analysis, ASX, Capital IQ

Major South Australian ASX-listed company movements

The three largest increases on a share price basis for the June quarter were:

  • Reproductive Health Science Limited – increased 106.7%, from $0.075 to $0.155 per share
  • Clean Seas Tuna Limited – increased 39.4%, from $0.033 to $0.046 per share
  • Southern Gold Limited – increased 21.1%, from $0.285 to $0.345 per share.

Flinders Mines Limited exited the SA Index via its change of registered office during the quarter, and E&A Limited exited after being delisted from the ASX.

Deloitte SA Index: Companies ranked by market capitalisation as at 30 June 2017

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