- Jul 3, 2009
Scale backs are always a pain, they tie up your money, then give most of it back.
.. At A$2466/oz NST is printing cash ..
I read today that over last two weeks more than u$600m ripped from gold etf’s because of redemptions.And we're back above $2,500aud after last night, NST swings have been hair-raising alright but I look at Saracen (SAR) as being an apt company to compare with Northern Star and I just did a comparative 6 month chart of the two - they're almost identical over that period and still up 10-15%.
'Between the Lines Finance' on Patreon (Poster: Nordesmic) has done a brilliant analysis of the GDX and GDXJ etfs, also the leveraged NUGT (3x).
I think he said that there'll be a 'rebalancing' in holdings to occur on this coming Friday which will apply to most Australian miners in the GDXJ. They will be reduced as a percentage of holdings. I'm guessing the Oz miners are to cop it more than the North American ones because Oz miners have increased in market value more due to the high AUD gold price they enjoy for their product - thus they've risen to a bigger percentage of the indexes. NST will be worst hit as it "has got too big" to qualify for the GDXJ and it will be sold off in the after market of the ASX on Friday (3rd Friday of the last month of the Quarter). This process is signalled so clearly well ahead that some entities reduce their holdings in anticipation. So the damage might already be done price wise. I think that's what he was saying.
Additionally, since the gold miner etfs have been sold by the Insts and public in the States, along with everything else in the scare, the managers of the etfs then have been forced to trim assets (stocks) to reflect the etfs' market value.
Then there's the fact of the recent placement and SPP for both SAR and NST to fund the Kalgoorlie Super Pit acquisition. SAR raised at 2.95 and NST raised at $9.00. Both dipped below their cap raising price (as is common) on Monday and both have now bobbed back above.
I would have topped up on Northern Star when it dipped below $9 if I'd had the disposable cash.
NST and SAR Comparative 6 mths
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