WA stocks up on global indices

THE market value of Western Australia’s 100 largest companies rose 14.7 per cent during 2010, outperforming most other market indices, and finishing the year at $192.5 billion.

The Deloitte WA Index broadly followed the same trend as global markets, falling sharply in the first half of 2010 and rising strongly in the second half.

The index hit a low of $140.9 billion, in June 2010, and has jumped by 36.6 per cent since then.

Despite greater volatility, the WA Index outperformed the S&P 500 index in the US and the FTSE index in the UK, which achieved annual growth of 12.8 per cent and 9 per cent respectively. The ASX and Japan’s Nikkei both finished 2010 below their 2009 close.

“Mid-tier Western Australian companies provided the substance behind the strong gains by the companies listed in WA,” Deloitte national leader of energy and resources in Australia, Keith Jones, said.

“Many mid-tier companies have been able to capitalise on the continuing demand for commodities and have been able to source capital to either build their resource position or advance their mining projects.”

WA’s largest companies, Woodside Petroleum and Wesfarmers, had little effect on the Deloitte WA Index in 2010. Their market capitalisation finished down a combined 1.9 per cent.

Mid-tier companies reaped the benefits of rebounding demand and prices for key commodities globally and increased appetite for equity investment, which has enabled projects to be successfully advanced and pushed up the value of successful explorers and miners.

The best performing stocks over the year had interests in gold or iron ore, reflecting the sustained strong gold price and the massive jump in the iron ore price over the year.

Equatorial Resources had the highest growth for the year with a 2,896 per cent increase ($287 million) to close at spot 87 in the Deloitte WA Index at December 31, 2010.