Local firms’ record highs

THE strength of Western Australia’s commodities sector has again been underlined, with WA-listed company values hitting all-time highs, according to new research from Deloitte.

According to the Deloitte WA Index, WA stocks have increased in value by 36.5 per cent over the 12 months to May 31, to finish at a value of $196.3 billion.

Deloitte said the total value exceeded the previous record high achieved prior to the global financial crisis in 2008-2009.

The largest increases in market capitalisation for the period came, unsurprisingly, from resources-focused firms.

Bathurst Resources increased its market capitalisation from $15 million to $846 million, to rank 31st on the index; Equatorial Resources’ share price rocketed more than 500 per cent and its market cap grew from $15 million to $329 million; and Aspire Mining’s market cap rose from $38 million to $410 million, with a share price increase of around 600 per cent.

Drilling down on the results, WA managing partner Keith Jones said Australian mineral exploration companies had increasingly turned their focus on Africa, with many of them shifting into African assets in the past 10 years.

“Seventy per cent of the top 10 percentage growth companies over the past 10 years have African assets,” he said.

“While Africa is still a challenging environment in which to do business, many Australian companies have found the quality and size of the resource assets worth the risk attached to the investment.”

Mr Jones warned, however, that labour supply would increasingly become a key factor in determining the feasibility of major projects in Australia.

“With its ageing population and dwindling migrant numbers, Australia urgently needs to develop a collaborative framework to address its local labour market requirements,” he said.

“This requires a complex and sophisticated response to the numerous challenges facing many parts of Australia now struggling to source and retain appropriately skilled workers,” he said.