WA stock values fall in January

The market value of listed Western Australian stocks fell in January by 7.6 per cent, its first fall in 12 months, new figures from the Deloitte WA Index show.

It was index's first decline in market capitalisation value since January last year, dropping to $155.1 billion, and follows the downward trend in other world indices during last month.

Australia's Alll Ordinaries index dropped 5.9 per cent during the month, followed by the FTSE 100 and Nikkei with falls of 4.5 per cent and 3.3 per cent respectively.

"Following a very strong 2009 where stock values rose by 123% in Western Australia, January has seen the Deloitte WA Index experience a sharp fall in value," Deloitte WA managing partner Keith Jones said.

The fall was largely driven by Wesfarmers, Woodside Petroleum and Eldorado Gold Corporation posting significant declines of $3.8 billion (12 per cent), $3.6 billion (10.3 per cent) and $1.1 billion (12.8 per cent) respectively.

Some smaller stocks performed well in January including Amcom Telecommunications, Iron Ore Holdings and Berkeley Resources, with the market capitalisation of each company increasing by 45.2 per cent, 40.9 per cent and 30.5 per cent, respectively.

In January, Amcom announced it had successfully completed the capital management initiative announced during 2009, which involved the cancellation of 81 million options and the underwriting by Euroz Securities. This resulted in the raising of $25 million, placing Amcom in a net cash position.

Shares in Iron Ore Holdings rose following a new discovery at its Koodaideri South project in WA. High grade iron mineralisation had been reported at the Fingers prospect, with significant intercepts grading up to 59.9 per cent iron. This project is located near Rio Tinto and BHP Billiton's iron ore mining operations in the Pilbara's Yandicoogina region.

Meantime Berkeley Resources announced it had terminated its head of agreements signed in March 2006 with French nuclear power group Areva NC. In doing so, any rights previously granted to Areva for off-take or marketing of uranium production from Berkeley's projects have been terminated with immediate effect, leaving Berkeley free to negotiate similar agreements with other parties. Further, encouraging drilling results of the Salamanca Uranium project were announced in January.

Most commodity prices were down in January, including significant falls for zinc (17.2 per cent) and lead (16.7 per cent).

A fall in demand from China, coupled with overproduction and resultant stockpiling of zinc and lead, contributed to the fall in price during January.

Copper, oil, aluminium and uranium also posted declines of 8.4 per cent, 8.2 per cent, 6.8 per cent and 4.5 per cent respectively. Platinum and palladium were the only commodities to demonstrate positive movement, with increases of 2.7 per cent and 2.4 per cent respectively.