One industry source, who asked not to be named, said that South African asset and fund managers in an election year were looking for good hedge stocks and saw value in gold and gold equities. And its shareholding remains close to half South African. On that front, it’s interesting to note that AngloGold Ashanti – which has exited South Africa as a producer – has seen its share price rise close to 30% in the year to date and its 2024 P/E forecast is a promising 13.16. And I think people look and say we are not interested in gold equities, we don’t understand it.” “So, making money in equities and bonds has been so easy for so long. “Since 2000 you had a massive run in equities, and then there was the global financial crisis, and then they spent their way out of it, incurred more and more debt, and markets have fully recovered,” Bruce Williamson, a mining analyst at Integral Asset Management, told Daily Maverick. There are North American fund and asset managers invested in mining, including gold equities, but overall there is much less interest in these sectors there. South African investors understand and are comfortable with gold equities – this has deep historical roots. Newmont’s and Barrick’s are skewed towards North America. Harmony’s is 40% South African and 40% American, and Gold Fields’ is 44% South African. Gold’s rand price has shot up 20% so far this year, and that will flow to the bottom line of Harmony and Gold Fields’ mechanised South Deep operation – though the latter accounts for only 14% of Gold Fields’ global production.Īnother potential factor is the shareholding profiles of the companies. This has unfolded against the backdrop of a red-hot gold price, which has hit record highs above $2,400 an ounce in recent days – a rise of more than 16% since January. Newmont’s forecast P/E ratio for this year is 18.90, and Barrick’s is 18.10. Their share prices are down about 5% and 6% year-to-date, whereas over the past five years they were respectively 22% and 28% higher. The contrast with the world’s two top gold producers, which have no assets in South Africa – US-based Newmont and Canadian-based Barrick Gold – is stark. These are relatively low, suggesting the current share value is low relative to earnings.

Harmony’s is 11.09 and Gold Fields’ is 14.0, according to Nasdaq data.

The price/earnings (P/E) ratio forecasts for this year for both companies are also stellar compared with peers.

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