Latest Commonwealth Bank data reveals Agribusiness sector outperforms broader market.
21 April, 2009: After a turbulent 12 months, the listed agribusiness sector outperformed the broader market during the past month and continues to perform strongly against other sectors, according to recently-released data by the Commonwealth Bank.
The April Commonwealth Bank Agri Indicators Report revealed the listed agribusiness sector has swung back into positive territory during the past month to deliver gains of 12.8 per cent, outperforming the S&P/ASX200 which gained 12.4 per cent.
Brendan White, Executive General Manager, Commonwealth Bank Agribusiness said as equity markets rallied last month, the sector‟s move back into positive territory is encouraging news for investors.
“The resilience of the agribusiness sector was once again obvious during the past month. Of the 16 stocks in the Commonwealth Bank Agribusiness Indicator, 11 returned more than 10 per cent over the past month with seven stocks experiencing returns greater than 20 per cent,” he said.
“Whilst the sustainability of the recovery is critical, the last few weeks certainly have provided a more positive outlook for investors with exposure to stocks within the Agribusiness sector.” Mr White said.
With the February company reporting season now well and truly over, the consensus outlook for the Agribusiness sector has improved since last month however investors will continue to remain cautious given the continued uncertainty surrounding the broader market outlook.
“The April Agri Indicators Report confirms that whilst the market will remain volatile a number of the agri stocks continue to trade at a discount to their underlying fundamentals. Although this may present strong buying opportunities investors will no doubt remain cautious in the short term.”
Notes to editors:
i. About the Commonwealth Bank Agri Indicators Report The Commonwealth Bank Agri Indicators is created around three 12 month forecasting models – Fundamental Return (consensus forecasts of earning and dividends for individual stocks in the sector), Exuberance (proprietary measure of market mis-pricing), and Volatility (derived from proprietary methods of modelling realised volatilities, detecting changes in long-run levels and correcting for switchbacks and other correlation patterns in the data).
The Commonwealth Bank Agribusiness index measures the performance of the Commonwealth Bank defined „Agribusiness‟ sector over time. The Commonwealth Bank Agribusiness sector currently consists of 16 rural-dependent companies: Australian Agricultural Company Limited (AAC), ABB Grain Limited (ABB), AWB Limited (AWB), Futuris Corporation Limited (FCL), Forest Enterprises Australia Limited (FEA), GrainCorp Limited (GNC), Gunns Limited (GNS), Great Southern Limited (GTP), Incitec Pivot Limited (IPL), Nufarm Limited (NUF), Primeag Australia Limited (PAG), Ruralco Holdings Limited (RHL), Ridley Corporation Limited (RIC), Select Harvests Limited (SHV), Tassal Group Limited (TGR), Timbercorp Limited (TIM). Companies previously included in the sector but since removed due to delisting or exiting the All Ordinaries index include Queensland Cotton Holdings Limited (QCH) and Auspine Limited (ANE).
The Commonwealth Bank Agribusiness index is a non-float adjusted, market-cap weighted index constructed using the same methodology as the S&P index series. To be considered for inclusion in the index, each stock must be a in the All Ordinaries index. The Commonwealth Bank Agribusiness index begins on 3 April 2000 which is the same date as the launch of the S&P/ASX index series in Australia. At inception there were 8 stocks included in the index. This number is currently 16.
The Commonwealth Bank Agri Indicators should be used as a guide only to the performance of the Agribusiness sector, as a way to measure its performance and potential return over the coming months and year. The Commonwealth Bank Agri Indicators report is attached.
- DISCLAIMER: This report has been prepared without taking account the objectives, financial situation or needs of any particular individual. For this reason, any individual should, before acting on the information in this report, consider the appropriateness of the information, having regard to the individual's objectives, financial situation and needs and, if necessary, seek appropriate professional advice. Past performance is not a reliable indicator of future performance. Commonwealth Bank of Australia ABN 48 123 123 124, AFSL 234945. A full copy of the Agri Indicators Report can be obtained by contacting our AgriLine on 1300 245 463 7am to 7pm (AEST time), Monday to Friday.
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