Standard & Poor’s, the leading provider of Australian equity indices, is pleased to announce the launch of two, new, real-time sector-specific indices in the Australian market: the S&P/ASX 300 Metals & Mining Index (XMM), and the S&P/ASX All Ordinaries Gold Index (XGD).
“Both indices will offer real-time insight into industry trends, and will provide more precise monitoring of sectoral performance for companies and benchmarking for investors,” said Jason Hill, Director and Head of Standard & Poor’s Index Services. “These indices are ideally designed to support investors, the Australian mining sector--which currently is experiencing robust operating conditions--and other stakeholders.”
At June 30, 2006, the resources sector accounted for more than 20% of total ASX domestic market capitalisation, and around one-third of listed companies by number.
The development of these indices reflects both Standard & Poor’s and the Australian Stock Exchange’s ongoing commitment to the Australian market, and utilises the inherent flexibility within the Global Index Classification System (GICS) to ensure the special needs of the Australian market are met. The new indices are the result of extensive market consultation by Standard & Poor’s.
Commenting on the ASX’s involvement with this initiative, Peter Hiom, Group Executive of Business Development for the ASX, said, "ASX has always been a strong supporter of the resources sector and resource and mining constituents. We have worked closely with Standard & Poor’s to consult the industry, and strongly support the methodology Standard & Poor’s has developed. We believe that the indices will better equip the financial community with sound investment and benchmarking tools."
The S&P/ASX 300 Metals & Mining Index is based on the S&P/ASX 300 Index, and is comprised of companies that are classified as being in the metals & mining industry. It includes producers of aluminium, gold, steel, precious metals & minerals, coal, and also diversified metals & minerals. The S&P/ASX All Ordinaries Gold Index will include companies that are included in the Gold subindustry of the All Ordinaries Index.
The mining & minerals industry is confident that the new indices will facilitate the further growth and development of these important sectors.
The Association of Mining & Exploration Companies’ (AMEC) Chief Executive, Dr. Justin Walawski, said the 160-member strong association had lobbied for the adoption of the new indices, with AMEC’s preference being for real-time indices:
“We’re supportive of these indices. The evidence suggests real-time indices are far more successful in terms of the profile that they obtain with industry, with media and with investors. We hope that institutional investors as well as smaller shareholders can use them as a mechanism to assess their returns and the performance of the sector at the junior to mid-tier end. In turn, we would then hope it provides some incentive for greater investment as well.”
Dr. Walawski said the Federal Government’s Mineral Exploration Action Agenda Implementation Group had also strongly backed the proposed establishment of the indices.
Mitchell H Hooke, Chief Executive of the Minerals Council Of Australia and Chair for the Finance Group, Minerals Exploration Action Agenda, also expressed his support for the new indices, saying, “Capital markets have never been more global, more transparent, or more competitive. Comprising around 8.5% of Australia’s GDP, the Australian minerals industry is a foundation for Australia’s future economic prosperity.”
“Continued growth and prosperity is dependent upon attracting investment. This, in turn, is a function of differentiating the sector’s performance in equity markets. The introduction of real-time sector-specific resources indices should better promote the minerals industry’s performance, better facilitate investor marketing, and assist investor decision making,” he said.
The Metals & Mining and Gold indices will be distributed alongside the existing suite of S&P/ASX real-time indices, and will, therefore, be available through the ASX SEATS Trader Workstation, leading information vendors, and media publications. Further information on the new indices can be found at www.standardandpoors.com.au under Indices, and at www.asx.com.au.
