b'CommentaryCanberra observedThe CPI for Australia has increased Canberra observed from 70 in 2000 to 135 in 2023almost doubling. So, the All Ords, which have increased from 3258 to 7502 in the same period, have delivered an annual return David Denham AMof about 6 % per annum. This does not Associate Editor forGovernment included dividends so it should have Edenham1@iinet.net.au been a sound investment.The resource companies have done better because their total value has 2023 a solid yearfor Australian23years. The trouble with these numbersincreased from $81 bn to about $600bn resource companiesis that they are dominated by the top fourin the same period. However, in 2000 (BHP, Fortescue, Woodside and Rio Tinto).there were just 16 resource companies in 2023 was a volatile year for the All OrdsThe total market capital of these four is 75%the top 150, now there are 25. One must Index. It declined by 9% during Augustof the total of 25 companies in the top 150. be careful using any comparisons.through October, but then rebounded by 11% to reach a record of 7829 at the endInvestment in resource companies of the 2023.has been rewarding How did commodity prices fare Meanwhile, the resource companiesFigure 2 shows how the All Ords, theduring 2023?in the top 150 companies maintainedtotal Market Capital of the resourceFigure 3 shows how four of the main steady performances throughout the year.companies in the top 150 companiescommodities fared from 2021 through In January their total market capital waslisted on the ASX and our largest2023.$594 bn, and at the end of 2023 it wascompany BHP, has performed.$605 bn. The highest value was $624bnNotice the big increase in February 2022,Gold doing wellat the end of January, and the value neverwhen BHP transferred it shares fromAlthough it cant be drunk, eaten or used went below $556 bn throughout2023. London to the ASX. From 2000 until nowwidely in manufacturing industries, the Figure 1 shows the plots for the lastthe resource companies have performedprice of gold continues to rise. From twoyears and Figure 2 shows howbetter the ASX, but that may haveOctober 2022, when the price dropped theseparameters plot over the laststopped in the last two years. to US $1650/oz, it has risen steadily to December 2023 when it reached US$2023/oz According to the World Gold Council (https://gold.org) Australia produced 328t of gold in 2022 and is in third position behind China (368 t) and Russia (331t). If you could cash in the gold, this amounts to about US$21.3 bn per year! No wonder explorers are still hunting forit.Petroleum price declinesDespite wars in Ukraine and Israel, the price of West Texas Crude has steadily declined from its peak of US$119/bl in June 2022 to about $US70/bl at the end of December 2023. No wonder the market capital of Woodside has declined from $65 bn to $60 bn during 2023. Iron Ore price increasesThe iron ore price increased from $US109/t at the start of 2023 to $US135/t at the end of the year. Rio Tinto and Fortescue benefited from this increase because their market capital values during 2023 grew from $45-49 bn, and $68-87 bn, respectively.Figure 1. The All Ords Index (blue) and the total Market Capital of the resource companies (orange) in theThe wars in Ukraine and Israel and top 150 companies listed on the ASX in 2022. the Chinese demand are crucial in 30 PREVIEWFEBRUARY 2024'