WA listed companies jump in September

The energy and mining industries have driven a 9.9 per cent jump in the market capitalisation of WA listed companies to $167.1 billion in September.

According to the latest Deloitte WA Index, WA companies have increase in value by 18.6 per cent in the three months to September 30.

They have recovered almost all of the value lost in the six months to June 30 where international instability and the proposed Resource Super Profits Tax depressed the market value of shares.

The biggest movers in September were Woodside Petroleum (up 6.6 per cent), Fortescue Metals Group (up 10.1 per cent) and Equinox Minerals (up 18.1 per cent).

The 'movers and shakers' within the index were Ampella Mining which increased its market capitalisation to 72.2 per cent, Metals X which (70 per cent) and Resolute Mining (67.4 per cent).

"The influence of rising prices for oil and nickel was especially present in the market this month, with exceptional performances from within the mining sector," Keith Jones, managing partner of Deloitte WA said.

"Manufacturing activity in China has accelerated during the month, which has resulted in an increase in the demand for WA commodities," Mr Jones said.

According to the Deloitte Index prices for all commodities except iron ore rose in September.

Silver and palladium were the stand out performers of the precious metals increasing by 12.3 per cent and 12.5 per cent respectively.

See statement from Deloitte below:

The market capitalisation of Western Australian (WA) listed companies which comprise the Deloitte WA Index increased by 9.9% for the month of September 2010, maintaining its strong growth to close at $167.1b.

WA companies have increased in value by 18.6% in the three months to 30 September recovering almost all of the value lost in the six months to 30 June where international instability and the proposed RSPT depressed the market value of shares.

The energy and mining industries were the driving forces during September, with companies such as Woodside Petroleum Limited, Fortescue Metals Group Limited and Equinox Minerals Limited performing strongly, with increases in their market capitalisation for the month of 6.6%, 10.1% and 18.1% respectively.

"The influence of rising prices for oil and nickel was especially present in the market this month, with exceptional performances from within the mining sector," Keith Jones, Managing Partner of Deloitte WA observed.

"Manufacturing activity in China has accelerated during the month, which has resulted in an increase in the demand for WA commodities," Mr Jones said.

Commodities have performed strongly in spite of the uncertainty which is continuing to plague economies worldwide. Price for all commodities surveyed increased in September, apart from iron ore which was down slightly by 1.4%. Silver and palladium were the stand out performers of the precious metals increasing by 12.3% and 12.5% respectively. Strong growth also occurred in the base metals with lead increasing by 11.8%, nickel 13.1%, aluminium 13.6% and tin 15.4%. Oil also performed well during September increasing by 11.2%, while Uranium was relatively steady with an increase of 1.1%.

All of the major global indices have bounced back during the month, with the US S&P 500 and the FTSE 100 both enjoying their strongest September in 70 years with increases of 9.1% and 7.8% respectively. Investors are cautiously approaching the market, with hopes that a double-dip recession might be avoided. The Nikkei and the All Ordinaries also regained some lost ground, with both indices recording 4.5% growth in the current month.

The 'Movers and Shakers' within the Deloitte WA Index for the month were also reflective of the strength of commodities prices, with metal-based companies Ampella Mining Limited, Metals X Limited and Resolute Mining Ltd recording increases in market capitalisation of 72.2%, 70.0% and 67.4% respectively.

Ampella Mining Limited increased its market capitalisation by $241m to close at $576m. Early in the month, the West-African gold explorer raised $41.9 million through the successful completion of a heavily oversubscribed private share placement. The placement of 21.5m ordinary shares was made to accelerate exploration programs at its Batie West gold project in Burkina Faso. This was shortly followed by more positive drilling results indicating the continuation of the gold resource at the project.

Australia's largest tin producer, Metals X Limited, increased market capitalisation by $143m in the month, closing at $348m, thanks to the strong movements in commodities. The Company announced exceptional results from drilling activities carried out at the Renison tin mine in Tasmania, and they also had success on the back of the announcement of an extension in the mine-life of the Jaguar project by base metals miner Jabiru Metals Limited, in which Metals X Limited is a major shareholder.

September saw Resolute Mining Limited's market capitalisation soar $222m to $552m following the release of record production results for the month of August from their Syama gold mine in Mali. The gold producer also completed a $40m equity raising exercise aimed at closing the company's gold hedge book enabling them to capitalise on future movements in the gold price.