{"id":418647,"date":"2020-07-22T07:27:25","date_gmt":"2020-07-22T05:27:25","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=418647"},"modified":"2020-07-22T07:27:25","modified_gmt":"2020-07-22T05:27:25","slug":"foreign-investors-shun-south-african-gold-stocks-despite-record-rally","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/418647\/foreign-investors-shun-south-african-gold-stocks-despite-record-rally\/","title":{"rendered":"Foreign investors shun South African gold stocks despite record rally"},"content":{"rendered":"

Not even a record rally can entice foreign investors to South African gold stocks.<\/p>\n

With gold prices soaring on the heels of monetary stimulus, shares in producers of the metal are back in favor around the world.<\/p>\n

But investors are fretting about supply disruptions at South Africa\u2019s mines as a result of soaring Covid-19 infections, according to Benguela Global Fund Managers Ltd.<\/p>\n

Non-residents sold a net R1.84 billion ($112 million) of the country\u2019s gold shares since the beginning of last week through Monday, even as a Johannesburg index of gold miners climbed more than 9% to the highest on record.<\/p>\n

That\u2019s 42% of the total outflows from the equity market in that period, more than any other sector, according to JSE Ltd. data.<\/p>\n

Virus infections in Africa\u2019s most-industrialized economy climbed above 370,000 this week, making it the fifth-worst affected country globally. Gold mines, already among the world\u2019s highest-cost producers, are struggling to boost output after a lockdown that temporarily closed down operations.<\/p>\n

\"\"<\/a><\/p>\n

\u201cThe risk of supply disruptions is becoming higher, especially at deep-level mines, as the infection rate increases,\u201d said Karl Gevers, a portfolio manager at Johannesburg-based Benguela, which oversees about $1.2 billion.<\/p>\n

\u201cHistory shows that a higher gold price is followed by higher costs 12 months later as miners start moving into lower grades, and this would cause some worry for investors.\u201d<\/p>\n

The rand\u2019s 5.3% gain against the dollar in July is also eroding profits for gold miners, who sell the metal for dollars, but pay costs in the local currency.<\/p>\n

That may be prompting some investors to take profits on gold stocks, said Gevers.<\/p>\n

The FTSE Johannesburg Gold Mining Index of five companies is up 15% this month, compared with the 3.7% advance for the benchmark FTSE JSE Africa All Share Index.<\/p>\n

\n

Read: South African stocks set to erase 2020 losses on Naspers and gold<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Not even a record rally can entice foreign investors to South African gold stocks.<\/p>\n","protected":false},"author":59,"featured_media":418661,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[12777,26],"class_list":["post-418647","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-benguela-global-fund-managers","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/418647","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=418647"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/418647\/revisions"}],"predecessor-version":[{"id":418667,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/418647\/revisions\/418667"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/418661"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=418647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=418647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=418647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}