Johannesburg - Investors seeking relative safety from the storm in emerging markets jumped on South African gold shares such as AngloGold Ashanti Ltd as the nation’s currency sank.
AngloGold, Sibanye Gold Ltd and Gold Fields Ltd were among the top five performers in the FTSE/JSE Africa All-Share Index at 10.39am in Johannesburg. The FTSE/JSE Africa Gold Mining Index climbed for a sixth straight day as slumping Chinese markets set off further emerging-market weakness.
“Gold stocks are an area of relative safety in such a risk-off environment,” said Ferdi Heyneke, a fund manager at Afrifocus Securities (Pty) Ltd. “The weaker rand also plays well into gold stocks” as mining companies’ costs are in the local currency and their revenue in dollars, Heyneke said.
The rand and local stocks joined a global rout of equities and commodities on the concerns over a slowdown in China, South Africa’s top export destination. The currency weakened as much as 8.5 percent to 14.07 against the dollar, a record, before trimming losses while stocks fell by the most in five years.
AngloGold traded 2.2 percent higher at R109.93, Sibanye Gold was up 0.3 percent at R16.16, Gold Fields rose 2 percent to R45.613 and Harmony Gold Mining Company increased 1.6 percent to R13.61.
BLOOMBERG