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Gold Fields mkt cap eclipses AnGold
25/04/2002 19:36 - (SA)
Johannesburg - South Africa's second biggest gold miner in output terms, Gold Fields, leapfrogged its larger rival AngloGold as the country's top gold share by market value on Thursday, traders said.
They said the move was thanks to its exposure to a pick up in the gold price. Gold Fields' market capitalisation by the close of trade on Thursday was R65.8 billion ($6.06 billion) after it ended 5.4% up at R140.20, just shy of a life high of R141.40 touched during the session.
AngloGold, which also hit a life high of R591 on Thursday, ended the day with a market capitalisation of R64.86 billion when it closed at R584.
AngloGold reports quarterly earnings next Tuesday and Gold Fields comes in with its results on Thursday. Investors in Gold Fields are smiling. Their stock has outperformed the local sector by 35% this year - rising from an end-2001 level of R57.50 and R35.50 this time last year.
Gold shares have run up on the strong performance by bullion and the gold index closed up 3.9% in a generally flat market. Bullion prices moved to two-year highs during the day, quoted at $308.70 an ounce - a level not seen since February 7, 2000 when prices edged over $319.
"We've always preferred Gold Fields to AngloGold. AngloGold has historically had big, big hedge positions and Gold Fields, which has an unhedged position and is geared to any move up in the gold price," said Greg Potter of BOE Securities.
Gold producers hedge their output, or contract to sell it forward, to lock in prices and protect themselves from a downturn in the bullion price.
However, if the gold price surges ahead of their contract prices they do not reap the benefit. Harmony Gold, the country's third largest gold producer, which has a policy of not hedging, also leapt to a fresh high of R160 a share and closed at R159. Its market capitalisation is R23.3 billion.
- Reuters
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