THE market value of Western Australia’s top 100 companies barely changed during the month of April, dipping fractionally to $195.8 billion, according to the Deloitte WA Index.
THE market value of Western Australia’s top 100 companies barely changed during the month of April, dipping fractionally to $195.8 billion, according to the Deloitte WA Index.
Market leaders Woodside Petroleum, with a market value of $37.1 billion at the end of the month, and Wesfarmers, worth $33.5 billion, both rose a little during the month.
The index was also boosted by the impact of the merger of two Kerry Stokes-chaired companies, Western Australian Newspaper Holdings and the Seven Media Group, to form Seven West Media Holdings.
The market capitalisation of Seven West Media Holdings closed the month at $3.1 billion, representing an increase of $1.9 billion during April.
Independence Group and Equinox Minerals also posted healthy gains.
During April, nickel and gold miner Independence declared its takeover bid for Jabiru Metals as unconditional.
Africa-focused copper miner Equinox was boosted by an agreed takeover bid by Canada’s Barrick Gold Corporation.
The major market dynamic during the month was the strong rise in precious metal prices, with silver (27.59 per cent), gold (9.34 per cent), platinum (6.01 per cent) and palladium (3.83 per cent) all rising.
The price of other commodities fluctuated, with rises in oil (6.78 per cent) and iron ore (5.28 per cent) and falls in uranium (-11.2 per cent) and lead (-8.46 per cent) highlighting the variations.
Deloitte said the extraordinary rise of silver by 27.5 per cent during April to close at $US47.95/troy oz was influenced by many factors. One significant factor was that investors, encouraged by recent increases in value, continued to buy silver as the metal saw significant interest from the salaried class looking for safe investment havens. The recent run has resulted in the metal trading at its highest price since January 1980.
Gold followed this trend, recording a closing price of $US1,563.60/troy oz, an increase of 9.3 per cent on March.
Oil prices have also continued to increase, reflecting the uncertainty that is attributed to the supply constraint concerns resulting from instability in the Middle East and Northern Africa oil regions. The price closed at $US113.39/bbl.
“Demand for precious metals remains high due to the continuing uncertainty in the Middle East and also the increasing concern about future inflation both in Australia and overseas. Commodity prices are responding to short-term issues, which is creating volatility,” Deloitte WA managing partner and national head of energy and resources, Keith Jones, said.
The Western Australian economy is benefiting from continuing demand for resources, however growth is being constrained by both infrastructure and capacity limitations.
The decline in Deloitte’s WA index during April was exceeded by the national All Ordinaries index, which fell by 0.6 per cent.