The Australian All Ordinaries Index (AOI), commonly known as the All Ordinaries or All Ords, is a collection of nearly all of the ordinary (common) shares listed on the Australian Securities Exchange (ASX). The market capitalisation of the companies listed on the All Ords accounts for over 95 per cent of the value of all shares listed on the ASX. When it was established, the All Ordinaries had a base index of 500 points. In April 2000, the All Ordinaries was restructured to include the 500 largest companies in Australia by market capitalisation.
During the global financial crisis started in 2007/08 the index fell over 50 per cent. Between October 2007 and March 2009, the All Ords fell from around 6870 points to around 3120 points The All Ords reached its highest value of 6873.20 points on 1 November 2007. Its lowest value in recent history was on 6 March 2009 when it fell to 3,111.7 points. The index has yet to recover back to its November 2007 high. It is currently floating around 5,630 points around on 11th May 2015. The largest company by market capitalisation on the All Ordinaries Index is Commonwealth Bank of Australia (ASX:CBA) followed by companies such as Westpac Banking Coproration (ASX:WBC), BHP Billiton Limited (ASX:BHP), Australia and New Zealand Banking Group (ASX:ANZ) and National Australia Bank (ASX:NAB). The Financials sector has the largest weight on the index.
Since the global financial crisis, the largest single day fall occurred on 5 August 2011 when the All Ordinaries fell 4.6 per cent. The All Ords index has risen significantly since 2012. However, last year the commodity price cycle inhibited the growth of the index. Australia had previous experienced a commodity investment boom. As global demand for commodities waned, many major mining companies listed on the All Ordinaries faced significant headwinds. Since reaching a medium-term low in mid-December, the All Ords index has rallied nearly 10 per cent. In the recent weeks, Australian shares have been hampered by low commodity prices and falling business confidence amid subdued economic growth. The All Ordinaries index has fallen over 5 per cent since the end of last month.
Author: Imran Valibhoy
May 11, 2015
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.