Wesfarmers, miners boost WA's market cap

Following three tough months Wesfarmers and the state's miners helped the market capitalisation of Western Australian listed companies, which comprise the Deloitte WA Index, to bounce 5.3 per cent higher in July to $148.4 billion.

Deloitte said the world's major indices performed well in July, with the FTSE 100 and US S&P 500 increasing by 7.3 per cent and 5.6 per cent respectively.

The All Ordinaries and the Nikkei increased by 4.2 per cent and 3.3 per cent respectively. 

Deloitte WA managing partner, Keith Jones said July continued to see Asian economic growth and signs of recovery in America.

"However, volatility remains a key feature in the global market where regional factors are affecting sentiment, and economic recovery is variable," Mr Jones said. 

"During July we also saw a strong increase in commodities values, particular base metals, which support strong growth for major miners."

Leading the way with a strong $2.5 billion increase in market capitalisation was Wesfarmers Limited, up 8.5 per cent to a July month end balance of $31.3 billion.

The Wesfarmers increase played a significant role in the growth of the Deloitte WA Index and was on the back of a favourable fourth quarter to the 2010 financial year and the release of positive full year retail sale results in late July. 

The 'Movers and Shakers' within the Deloitte WA Index for July were Arafura Resources Limited, Deep Yellow and Sandfire Resources NL, having significant increases in market capitalisation of 70.2 per cent, 61.5 per cent and 49.9 per cent respectively. 

The increase in Arafura Resources' market capitalisation of $85.7 million, to a total of $208 million at 31 July 2010, is primarily a result of the recent increases in the price of rare earths.

Arafura has continued development of its Nolans Project in the Northern Territory with comprehensive design and engineering studies of the Nolans mine and beneficiation plant expected to be completed by the end of 2010.

The company is aiming to commence production by 2013. 

The market capitalisation of Deep Yellow finished at $236.4 million for the month of July, an increase of $90.1 million.

The announcement of positive results from the drilling programme at the Mount Isa district, which showed a large number of high-grade intercepts at Deep Yellow's 100 per cent-owned Miranda Project, contributed to a 36 per cent increase in the company's share price.

Further announcements pertaining to the results of the expansion of the drilling in the Shiyela Magnetite Mineralisation in Namibia, which confirmed the project's potential, coupled with the upgrade and expansion of Jorc Resources at the Inca Uranium Deposit in Namibia, resulted in a further leap in the share price. 

Sandfire Resources increased its value by $66.8 million to finish with a market capitalisation of $627.4 million for the month of July.

This increase followed a number of key achievements in the month, with the company discovering a new zone of massive sulphides at its 100 per cent DeGrussa Copper-Gold Project in WA, as well as the substantial increase of the DeGrussa copper resource by 43 per cent to 533,000 tonnes.

Sandfire is also well placed to further explore and develop the DeGrussa Project after completing a $93.3 million share placement to LS-Nikko Copper Inc during the month.

The principal miners also showed strong performances supported by a general increase in the price of commodities.

The biggest mover of the commodities was lead, which rose 19.1 per cent, leading an overall positive month for base metals in particular.

This increase was largely driven by diminishing lead stockpiles at the London Metal Exchange (LME) over the month. Zinc, copper, palladium, aluminium, tin and uranium posted double digit growth, increasing by 13.2 per cent, 12.2 per cent, 12.0 per cent, 10.8 per cent, 10.8 per cent, 10.2 per cent respectively.

Precious metals gold and silver suffered decreases this month of 4.9 per cent and 3.2 per cent respectively. 

Full announcement below:

WA stocks rebound after 3 months of decline

15 August 2010 

After three negative months, the market capitalisation of Western Australian (WA) listed companies which comprise the Deloitte WA Index bounced higher in July, increasing by 5.3% to $148.4bn. 

The world's major indices performed well in July, with the FTSE 100 and US S&P 500, with increases of 7.3% and 5.6%. The All Ordinaries and the Nikkei increased by 4.2% and 3.3% respectively. 

"July continued to see Asian economic growth and signs of recovery in America. However, volatility remains a key feature in the global market where regional factors are affecting sentiment, and economic recovery is variable," Managing Partner of Deloitte WA Keith Jones stated. 

"During July we also saw a strong increase in commodities values, particular base metals, which support strong growth for major miners," Mr Jones said. 

Leading the way with a strong $2.5bn increase in market capitalisation was Wesfarmers Limited, up 8.5% to a July month end balance of $31.3bn. The Wesfarmers increase played a significant role in the growth of the Deloitte WA Index and was on the back of a favourable fourth quarter to the 2010 financial year and the release of positive full year retail sale results in late July. 

The principal miners also showed strong performances supported by a general increase in the price of commodities. The biggest mover of the commodities was lead, which rose 19.1%, leading an overall positive month for base metals in particular. This increase was largely driven by diminishing lead stockpiles at the London Metal Exchange (LME) over the month. Zinc, copper, palladium, aluminium, tin and uranium posted double digit growth, increasing by 13.2%, 12.2%, 12.0%, 10.8%, 10.8%, 10.2% respectively. Precious metals gold and silver suffered decreases this month of 4.9% and 3.2% respectively. 

"Positive sentiment in global equity markets, stemming from positive economic data and company earnings, contributed to increased confidence in the metals markets," Mr Jones said. 

The 'Movers and Shakers' within the Deloitte WA Index for July were Arafura Resources Limited, Deep Yellow Limited and Sandfire Resources NL, having significant increases in market capitalisation of 70.2%, 61.5% and 49.9% respectively. 

The increase in Arafura Resources Limited's market capitalisation of $85.7m, to a total of $208.0m at 31 July 2010, is primarily a result of the recent increases in the price of rare earths. Arafura has continued development of its Nolans Project in the Northern Territory with comprehensive design and engineering studies of the Nolans mine and beneficiation plant expected to be completed by the end of 2010. The company is aiming to commence production by 2013. 

The market capitalisation of Deep Yellow Limited finished at $236.4m for the month of July, an increase of $90.1m. The announcement of positive results from the drilling programme at the Mount Isa district, which showed a large number of high-grade intercepts at Deep Yellow's 100% owned Miranda Project, contributed to a 36% increase in the company's share price. Further announcements pertaining to the results of the expansion of the drilling in the Shiyela Magnetite Mineralisation in Namibia, which confirmed the project's potential, coupled with the upgrade and expansion of Jorc Resources at the Inca Uranium Deposit in Namibia, resulted in a further leap in the share price. 

Sandfire Resources NL increased its value by $66.8m to finish with a market capitalisation of $627.4m for the month of July. This increase followed a number of key achievements in the month, with the company discovering a new zone of massive sulphides at its 100% DeGrussa Copper-Gold Project in WA, as well as the substantial increase of the DeGrussa copper resource by 43% to 533,000 tonnes. Sandfire is also well placed to further explore and develop the DeGrussa Project after completing a $93.3m share placement to LS-Nikko Copper Inc during the month.