AAG reveals September's agribusiness winners and losers
In the aftermath of the collapses of Timbercorp and Great Southern, consumer confidence is continuing to play a significant role in the performance of listed agribusiness companies, according to the Australian Agribusiness Group (AAG).
AAG director Tim Lee said consumer confidence was still affecting performance, “with concern regarding the financial standing of companies strongly reflected back on their market value”.
Figures for the month of September in the AAG Agri-Index reflected market concerns toward recent capital raisings in the sector, Lee said. For example, Forest Enterprises sought additional funds of $39.5 million, and its share price closed 57 per cent lower for the month. Elders also closed 39 per cent lower in September after recently announcing annual losses of more than $415 million.
While the group said the collapses of Timbercorp and Great Southern were continuing to have an impact on market performance, some affected companies were able to experience some positive momentum during September. For example, Select Harvests gained 71 per cent during the month, with the company retaining management rights to Timbercorp's almond orchards until the end of the original contract, despite the sale of the orchards.
Select Harvests’ gain was on top of a return of 122 per cent for the 2009-10 financial year to date, AAG pointed out.
Overall, AAG reported an increase of 14 per cent in the AAG Agri-Index since July this year. The group said while the overall rate of growth did slow in September, the index still reported a 2 per cent increase for that month.
Lee said the AAG Group expects the agribusiness sector as a whole to remain stable in the coming months, with growth for the 2009-10 financial year to be “a slow and steady process”.
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