18/02/2009 - 22:00

WA mining sector stocks rise in January: Deloitte

18/02/2009 - 22:00

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DESPITE the doom and gloom coming from the state's mining sector, the January Deloitte WA Index revealed stock values of miners rose more than 3 per cent, bucking the overall trend.

DESPITE the doom and gloom coming from the state's mining sector, the January Deloitte WA Index revealed stock values of miners rose more than 3 per cent, bucking the overall trend.

The index measures the total market capitalisation of Western Australian listed companies, with the overall index falling 3.17 per cent, or $2.56 billion, to close at $73 billion.

This compared to the November and December market capitalisation result of $75 billion.

Deloitte Perth office managing partner Keith Jones said the slight recovery in the mining sector in January was positive, however companies needed to remain focused on cash conservation and cost control to succeed in 2009.

"During 2008, we witnessed a sharp reversal in the commodity price boom which, when combined with the worldwide credit squeeze, has and will continue to place a significant constraint on the capacity of Western Australian companies to raise capital and credit," he said.

"The Western Australian mining sector remains dependant upon offshore demand for commodities and any expected growth in value is closely linked to demand from China and impact of the worldwide economic crisis on commodity prices."

Movers and shakers within the Deloitte WA Index during January included Grange Resources, Herald Resources and Anvil Mining.

The market capitalisation of Grange soared 412.9 per cent on the back of its merger agreement with Australian Bulk Minerals.

Anvil recorded a 100 per cent increase in its market capitalisation after reaching an agreement with project partner, Gecamines, and the government of the Democratic Republic of Congo over the Kinsevere project.

Herald's market capitalisation jumped 337 per cent during January.

Major world indices began the 2009 calendar year in decline, further eroding shareholder value. The Nikkei recorded the largest loss of 9.77 per cent, closely followed by the US S&P 500, the Australian All Ordinaries and the FTSE 100, down 5.11 per cent, 5.95 per cent and 4.61 per cent respectively.

Commodity prices had mixed movements during January.

The prices of silver and lead increased by 11.24 per cent and 10.23 per cent, respectively. Aluminium slumped by 12.72 per cent.

 

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