BN30 index makes slow start to year

A recent addition to the Business News offering is keeping track of WA’s performance on the markets this year. The opening weeks have not been good.

This year’s torrid global markets have had a local impact, with specially selected group of 30 Western Australian stocks taking a collective battering – with their share prices, combined to form a new index, dropping 6.5 per cent as of close of trade last Wednesday (January 13th).

The Business News 30, or BN30, is a composite index of 30 listed WA-focused or headquartered stocks that reflect the state’s economic activity and fortunes, making the index a barometer of the west’s financial performance.

Following the original formula of the world’s most-watched stock market index, the Dow Jones Industrial Average, the BN30 represents the sum of the component closing prices divided by the number of stocks and indexed to a base of 100.

After opening the year at 100, the index has fallen to 93.5, a drop not dissimilar to the ASX 200, down 7.4 per cent, and All Ordinaries, down 7.1 per cent.

Some of the state’s biggest resources companies, including Fortescue Metals Group, Woodside Petroleum, and Northern Star Resources are included in the list, while property players Peet, Cedar Woods Properties and BWP Trust also feature. Others include Seven Group Holdings, Monadelphous and Alexium International Group.

Local giant Wesfarmers, which owns Coles and Bunnings, also makes an appearance. That company announced last Thursday that it was seeking to expand its home improvement supply business to the UK through the acquisition of the Homebase improvement chain.

It would be Wesfarmers’ first major move away from its Australian base, with the deal worth around $700 million.

Homebase, which is owned by the Home Retail Group, has 265 stores across the UK and Ireland, with sales of around $3 billion.

Wesfarmers said the acquisition would provide a scalable platform to access the growing UK home improvement market.

Another BN30 member, Austal, also made headlines last week, with the resignation of long-serving chief executive Andrew Bellamy.