Dull fu­ture

Finweek English Edition - - COMPANIES & INVESTMENTS -

It’s roughly a month since Gold Fields made ef­fec­tive its bold un­bundling, cre­at­ing Sibanye Gold, a ve­hi­cle hold­ing the group’s ma­ture South African as­sets, ex­cept for South Deep, the 700 000 ounce/year mech­a­nised mine.

So, what hap­pened? Did one plus one equal three for Gold Fields and Sibanye Gold?

The an­swer is some­what in­con­clu­sive, not helped by the fact that there was a ma­jor sell-down in gold-backed ex­change­traded funds (ETFs) dat­ing from the be­gin­ning of the year ac­tu­ally. It sig­nalled broad an­tipa­thy to gold as an in­vest­ment in any guise, es­pe­cially as eq­ui­ties were re­cov­er­ing.

Ac­cord­ing to the Fi­nan­cial Times, 106 tons of gold sit­ting in ETFs were dumped in Fe­bru­ary, and more than 300 tons since the be­gin­ning of the year.

By mid-March, An­gloGold Ashanti was 17% lower when com­pared to 11 Fe­bru­ary when Sibanye Gold was listed on the JSE. Har­mony Gold fell 17% as well, while Gold Fields was some 24% lower. Sibanye Gold was largely un­af­fected by the sell­down per­haps in­di­cat­ing, even at this early stage, it s share­holder base i s a bit dif­fer­ent.

The fact is, how­ever, it is early days. The gold shares have re­cov­ered some­what, although it’s worth point­ing out that adding to­gether the share prices of Gold Fields and Sibanye Gold doesn’t equal the share price of Gold Fields be­fore the un­bundling. Although that’s a rudi­men­tary way of look­ing at things, an­a­lysts say the re­ac­tion to Sibanye Gold has been some­what neg­a­tive.

“I don’t buy the ar­gu­ment that sep­a­rat­ing Gold Fields’ mar­ginal as­sets from the group sud­denly gives it new im­pe­tus. If you can lib­er­ate the mines sep­a­rately, then

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