| In recent days, the international gold price has continued to rise, already surpassing $1,000 per ounce. Strong gold futures price has stimulated private Shandong companies into eye-catching performances. Humon, Shandong Gold Group and Tianye have all had increases in the last half month exceeding 25%.
The international gold price experienced a dramatic surge in September after only moderate increases for nearly half a year. On September 8, it finally exceeded $1,000 per ounce and fluctuated around this level in the next few days.
Since September 13, the price has stayed beyond $1,000 per ounce, almost reaching the peak price of $1,002.95 per ounce that appeared in March, 2008. Gold, overnight, has become a hot topic in the investment market.
On September 14, Humon shares closed at 52.12 yuan, realizing a huge increase of 10.85 yuan, or 26%, compared with the opening price of 41.30 yuan on September 2.
Shandong Gold Group has been known as the flagship amongst gold shares. It underwent an increase of 17.20 yuan, or 37%, within nine trading days.
Tianye, which entered the gold share market this summer, was the most popular individual share in the Shanghai and Shenzhen stock markets. Despite some adjustments being made on September 14, during the two months since July 8, its share price has risen from 8.40 yuan to 17.99 yuan, undergoing an increase of almost 120%. On the last trading day, it closed at 19.50 yuan, the highest it’s been for the past eight years.
Since increases of gold prices normally push up stock prices, some analysts pointed out that if gold prices could remain beyond $1,000 per ounce, the per-share profit of Shandong Gold Group would exceed 2.00 yuan. According to the industry’s standard price earning ratio (P/E ratio), the share prices of Shandong Gold Group are fair and reasonable.
Yet the risk of call-back during the increase of gold prices is unavoidable, and the pressure of underselling after the secondary market reaps profits, means adjustments to these gold shares can be expected.
By Li Jing |
