WA stocks stabilise in December

07/01/2009 - 14:42

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The market capitalisation of Western Australian listed companies remained steady at $75 billion in December but was down by over $100 billion on the same period last year, according to the latest Deloitte WA Index.

The market capitalisation of Western Australian listed companies remained steady at $75 billion in December but was down by over $100 billion on the same period last year, according to the latest Deloitte WA Index.

In its monthly report, Deloitte said the stability is in contrast to a 41 percent decline in the Index over the past three months. The Australian All Ordinaries was also steady, down by only 0.36 percent in December.

"This is the first month since September that we have not seen a significant fall in the market capitalisation of Western Australian companies. WA resources stocks achieved a small recovery with a gain of 2.15 percent within the Index," Deloitte Perth managing partner Keith Jones said.

In comparison, the Deloitte WA Index finished December 2007 more than $100 billion higher at $179.3 billion.

"During 2008, we witnessed a sharp reversal in the commodity price boom, which when combined with the world wide credit squeeze we are currently experiencing, has and will continue to place significant constraints on the capacity of Western Australian corporates to raise capital and debt. In 2009, companies will need to remain focussed on cash generation and cost control to succeed," Mr Jones said.

During the month of December, movers and shakers within the Deloitte WA Index included Pure Energy Resources, Blue Energy and Perseus Mining.

Pure Energy recorded a gain of 200.2 percent in market capitalisation in December. "The key driver behind this gain was the announced takeover offer by Arrow Energy Limited," Mr Jones said.

"During the month, Blue Energy Limited and Perseus Mining Limited also recorded gains with the market capitalisation of each company increasing by 114.3 percent and 94.1 percent respectively," said Mr Jones.

As announced by the company, Blue Energy's gain appears a response to other coal seams gas companies being involved in takeover transactions. The gain in Perseus Mining's market capitalisation was due to share capital being raised by the company during the month.

Major world indices recovered some of their 2008 losses in December. The Nikkei recorded the largest gain, up 4.1 percent, closely followed by the FTSE 100 and US S&P 500, up 3.9 percent and 0.3 percent respectively.

Commodities prices had mixed movements during December. Prices of Gold and Silver increased by 7.6 percent and 5.8 percent respectively. Oil slumped by 26.5 percent in December.

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