WA stocks outperform

WESTERN Australian stocks were again the nation’s strongest performers last month, with improving confidence and commodity prices helping resources companies.
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Kristie Batten

The Deloitte WA index showed the market capitalisation of the state’s listed companies grew for a fourth consecutive month, by 6.5% to $A155.2 billion, against a 4.1% rise in the All Ordinaries index.

Deloitte lead audit partner Tim Richards said renewed business confidence has benefited the WA economy.

“The WA economy has benefited from renewed business confidence, with a recovery in the housing sector, improvement in the labour market and low interest rates, combining with an Australian dollar that remains below parity with the US dollar, to increase optimism,” he said.

WA is expected to continue its strong growth, but Richards said the state needed to maintain its global competitiveness in order to achieve growth and prosperity in the long term.

“Gone are the days where commodity prices can sustain poor productiveness and inefficient performance,” he said.

“Western Australia will need to ensure that it is adaptable to changes in external forces and maintains a strong foundation in order to take advantage of the global demand for the state’s resources.”

Commodity prices had a better showing in September, with coal growing by 6.3%.

Base metal prices experienced mixed results with nickel posting the strongest gain of 4.8%, as a result of a proposed ban on export shipments by Indonesia.

Gold dropped 0.5% on the strengthening US dollar and ongoing speculation over the US Federal Reserve’s stimulus program.

While Allied Heathcare Group was the strongest mover, more than doubling its market cap, Tribune Resources and Northern Iron were standouts, rising by 57.1% and 54.1% respectively.

Tribune jumped after confirming it was looking at potentially buying out its East Kundana joint venture partner Barrick Gold, while Northern Iron boosted concentrate production.

The top three stocks remained Wesfarmers, Woodside Energy and Fortescue Metals Group, with all three posting modest market cap gains.

Iluka Resources remained in fourth position, though its market cap dropped to $4.3 billion from $4.8 billion on lower revenue due to weak mineral sands prices.

Regis Resources’ market capitalisation fell from $2 billion to $1.7 billion, though it remained the eighth largest company in the index.

Gold price volatility impacted some other producers, though Regis was hit harder by ongoing issues at its Garden Well mine.

Sundance Resources jumped nine spots to 47th, with its market cap improving to $323 million from $224 million off the back of a funding deal.