Finweek English Edition - - Cover -

THE 79 MIL­LION new shares that Gold Fields is­sued in Jan­uary raises the in­trigu­ing idea that man­age­ment funds are buy­ing the no­tion of a gold bull mar­ket. Not only was the place­ment over­sub­scribed but many of the same funds mopped up 64 mil­lion shares of Gold Fields in De­cem­ber. In to­tal, Gold Fields has en­larged its share cap­i­tal 29%, and the mar­ket is ap­plaud­ing.

“It’s prob­a­bly given a lot of hope to An­gloGold Ashanti,” says Stephen Roelofse of San­lam As­set Man­age­ment. The the­ory goes that the gold mar­ket ac­tu­ally moved side­ways last year rel­a­tive to re­sources stocks in gen­eral. “It’s quite sim­ply an op­por­tu­nity to get ex­po­sure to a sec­tor that lagged. An­gloGold will be en­cour­aged by the ease with which Gold Fields sold its shares. It shows an ap­petite for shares,” Roelofse said.

The rel­e­vance to An­gloGold Ashanti is that its par­ent com­pany, An­glo Amer­i­can, has said it in­tends to di­vest the re­main­der of its 41% stake in the gold unit. That’s equal to 113 mil­lion shares. In­vestors di­gested 27,6 mil­lion An­gloGold Ashanti shares in April last year at a mere 1% dis­count. The Gold Fields place­ment was at a 2,9% dis­count, which is not very heavy given that gold is record­ing lev­els last seen in the Eight­ies.

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