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SOURCE: [Reuters] – Stock valuations of gold miners in China, the world’s largest producer of the metal, have climbed to multi-year highs, a surprise on the face of it given that the country’s demand fell in 2014 for the first time in over a decade.
The median price-to-earnings ratio of Zijin Mining , Shandong Gold Mining, Zhongjin Gold , Chenzhou Mining, JinGuyuan and Shandong Humon Smelting – the six listed Chinese gold mining companies that are earning a profit – has risen to 57.4, the highest in five years, Thomson Reuters data shows. That compares with 22.1 a year ago.
he lofty valuations are tracking gains in the wider market. The CSI300 index of the largest listed companies in Shanghai and Shenzhen has jumped 50 percent over the past year, buoyed by hopes for economic stimulus measures. Earlier this month, the central bank reduced the amount of cash that banks must hold as reserves, boosting liquidity in the financial system. In November, it made a surprise cut in benchmark interest rates.
The post Valuations of Chinese Gold Miners Surge, Defying Dull Gold Price appeared first on Gold Editor.