SA SHARES IN VOGUE
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.