Gold Fields con­sid­ers Hong Kong

Finweek English Edition - - Companies & markets - DAVID MCKAY

GOLD FIELDS MAY sell its shares on Hong Kong’s Hang Seng stock ex­change later this year if a due dili­gence sup­ports the move, the com­pany says. If ap­proved, the list­ing will con­tinue the work of mak­ing the share trade­able around-the-clock, a strat­egy started in Oc­to­ber.

That was when Gold Fields took a list­ing on Dubai’s DIFX (Dubai In­ter­na­tional Fi­nan­cial Ex­change). Ac­cord­ing to Nick Hol­land, Gold Fields chief fi­nan­cial of­fi­cer, trade in Gold Fields on DIFX is “piti­ful”, but list­ing the stock there was not pred­i­cated on lift­ing turnover.

“There are in­di­vid­u­als ca­pa­ble of buy­ing R730m to R1,5bn ($100m to $200m) in one go,” says Hol­land. “You need only one of those big fish and you make the whole thing worth it.”

At the time of the DIFX list­ing, Gold Fields CEO Ian Cock­er­ill said liq­uid­ity was

mov­ing rapidly east from west. “Twenty to 30 years ago, all the cap­i­tal was in the West­ern mar­kets. To­day, and into the fu­ture, that liq­uid­ity is mov­ing rapidly East.”

The cost of list­ing on DIFX was about $100 000 with an­nual run­ning costs at about half that value.

Some days, there’s no trade in Gold Fields on DIFX at all. But the ex­change is still in its in­fancy, says Ge­orges Le­quime, an an­a­lyst for RBC Cap­i­tal Mar­kets. Ac­cord­ing to the DIFX web­site, five other com­pa­nies are listed on the ex­change, in­clud­ing a phar­ma­ceu­ti­cals com­pany and a ho­tel group. There are also a num­ber of fi­nan­cial prod­ucts backed by Deutsche Group.

There’s been some talk that in­vestors in the Mid­dle East tra­di­tion­ally pre­fer phys­i­cal gold, and with ac­cess to for­eign mar­kets of­fer­ing such tasty bites as Google and Walmart, there’s no par­tic­u­lar al­lure in blue chip gold min­ing com­pa­nies. Hol­land dis­agrees: “There are very dif­fer­ent in­vestors who buy phys­i­cal gold ver­sus an ex­change traded fund. There’s very lit­tle over­lap so we don’t think that’s an is­sue.”

Com­ment­ing on Hang Seng, Hol­land says trade tends to be bet­ter in gold stocks in China than Ja­pan, which was an­other op­tion.

There have also been some new list­ings on Hang Seng, cre­at­ing an ap­petite for gold. Hol­land says he’s im­pressed by China Vi­sion Re­sources, the com­pany that bought an es­ti­mated R5,7bn por­tion of the Op­pen­heimer fam­ily’s stake in An­glo Amer­i­can last year. It re­cently listed in Hong Kong and has raised aware­ness around gold and re­sources com­pa­nies, he says.

Only need one big fish. Nick Hol­land

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