As stock indices around the world grovel increasingly toward finding fresh multi year lows, listed gold stocks continue to reign as global equity champions, with a gain from lows seen four months ago of more than 100%, measured on a weighted average dollar basis. By comparison, the MSCI Barra dollar index for all global equities is not even 1% above its lows.  The latter index, like so many other composite indices, is at lows not seen in more than a decade. The KBW bank index, which measures the fortunes and misfortunes of 24 banks across the US, has managed to drift up by 10% from its low points, but those of its components that have not been disemboweled have been raised mainly by government bail outs. Looking more broadly at banking stocks, across the world, the lift from lows is now in the order of 18%, led by gentle rises in Chinese banking stocks, such as China Construction Bank, Bank of China, and ICBC. The aggregate market value of Chinese banking stocks is now the heaviest, country wise, among global banking stocks.INDICES

From

From

Points

high*

low*

MSCI world equities USD

688.64

-56.1%

0.7%

MSCI emerging markets USD

485.29

-61.3%

8.8%

S+P 500

676.53

-53.0%

1.5%

DJ Stoxx 600

159.10

-52.2%

2.4%

KBW banks

19.60

-78.1%

10.4%

STOCK GROUPS

Value

From

From

USD bn

high*

low*

Dow Jones Industrial

2131.63

-52.5%

7.4%

Top 100 global miners

770.82

-66.9%

61.7%

Oil stocks

1680.40

-56.2%

18.0%

S + P 500 Energy

851.57

-55.6%

14.5%

Gold stocks

212.37

-49.7%

112.9%

Gold Tier I

148.22

-49.1%

98.1%

Gold Tier II

40.75

-45.7%

166.2%

Gold Tier III

12.04

-55.5%

140.3%

Gold juniors

11.35

-61.1%

146.1%

Silver stocks

12.01

-64.7%

133.7%

Gold ETFs

40.95

-11.4%

41.9%

Phili gold & silver index

115.50

-44.8%

81.8%

Uranium stocks

13.87

-59.3%

65.9%

World banks (80)

1350.42

-70.1%

17.8%

* 12-month

Source: market data; analysis by Barry Sergeant

The prices of global mining stocks were savaged downwards from lofty peaks around May 2008; the rot really set in as commodity prices went increasingly south after crude oil peaked on 15 July 2008. The global financial crisis has exacerbated the profile of miners with overloaded levels of debt, a game that is yet to be played out.Dollar gold bullion prices have suffered the least among global commodities, with a current loss of about 12% from the peak seen in March 2008. It has become apparent, however, that investors have increasingly taken to investing in gold exchange traded funds (ETFs), which offer proxy ownership of physical gold bullion, and can be traded as simply as a listed gold, or other, stock. The world's biggest gold ETF, the US-listed SPDR Gold Shares ETF, currently holds USD 30.5bn of physical gold bullion.

Where a number of other sectors, in certain countries, have been forced to take government bail outs, miners across the world have raised, or are raising, non-bank cash, directly from investors and other miners, of USD 38.7bn over the past few months. More than half this amount, at USD 19.5bn, is earmarked to be invested by Chinalco in debt-ridden Rio Tinto; USD 12.3bn is earmarked for direct investment in equity stakes in various underlying prized Rio Tinto assets, while USD 7.2bn is proposed to go into Rio Tinto convertibles that could later have the effect of increasing Chinalco's stake in Rio Tinto at the parent level.Listed gold stocks have raised USD 5.3bn in the past few months. The vast majority of these transactions have been in the form of bought deals, where a few brokers buy wholesale blocks of fresh equity from a gold stock, and sell it on to many retail and institutional investors. The majority of these raisings have been only mildly dilutive for the gold stock involved. Newmont, a Tier I gold digger, sold 30m new shares to raise USD 1.1bn, and also sold convertibles to raise a further USD 450m.The total USD 1.6bn raised comprises less than 10% of Newmont's market value; Xstrata, a debt-riddled diversified miner, is, by contrast, raising USD 5.7bn on the back of a market value of USD 7.3bn, translating into a hugely dilutive issue. For investors with an esoteric bent, listed gold stocks have in fact been outperformed by a precious metal sibling in the form of listed silver stocks. The investable universe of primary silver stocks, however, is just USD 10.8bn, compared to USD 191bn for gold stocks, and is dominated by a hugely sizeable Fresnillo, which also dominates performance, with an increase of just over 300% in its London stock price, from lows seen just four months ago.GOLD STOCKS: SELECTED RECENT MINING CAPITAL RAISINGS

Current

Market

New

Price

To

stock

value

shares

per

raise

price

USD bn

sold (m)

share

USD m

EQUITY ISSUES

Iamgold

CAD 7.33

2.385

N/A

N/A

213.54

Simmer & Jack

ZAR 2.40

0.255

49.34

ZAR 2.24

10.56

Great Basin (1)

CAD 1.25

0.209

100.00

CAD 1.30

100.95

Lihir

AUD 3.05

4.279

172.00

AUD 3.00

330.81

Jaguar

CAD 6.67

0.403

13.92

CAD 6.20

66.99

Novagold (2)

CAD 3.31

0.466

57.69

CAD 1.30

75.00

Medusa

AUD 1.40

0.150

20.30

AUD 1.21

15.75

Westgold

AUD 0.21

0.019

0.00

AUD 0.20

3.65

Rusoro Mining

CAD 0.58

0.179

167.00

CAD 0.60

77.81

Gold Wheaton (1)

CAD 0.21

0.219

460.00

CAD 0.25

89.30

Allied Gold

AUD 0.41

0.124

61.65

AUD 0.50

19.76

Victoria Gold

CAD 0.37

0.038

16.68

CAD 0.45

5.83

Focus Minerals

AUD 0.02

0.019

1250.00

AUD 0.02

16.03

Int'l Tower Hill

CAD 2.95

0.102

2.00

CAD 2.50

3.88

Queenston Mining (3)

CAD 3.30

0.135

Two units

CAD 3.85

13.98

Newmont

USD 37.79

18.083

30.00

USD 37.00

1110.00

Newcrest

AUD 30.75

9.495

27.80

AUD 27.00

481.21

Kinross

USD 15.69

10.820

20.90

USD 17.25

360.53

Agnico-Eagle (1)

USD 48.26

7.479

9.20

USD 31.52

289.98

Osisko (1)

CAD 4.74

0.939

88.55

CAD 4.55

312.86

Red Back

CAD 7.20

1.278

17.15

CAD 3.50

46.61

Red Back

CAD 7.20

1.278

20.00

CAD 7.50

116.48

Harmony

USD 10.98

4.671

10.50

ZAR 93.20

93.56

Alamos Gold

CAD 7.92

0.651

9.40

CAD 8.00

58.39

Centamin Egypt

CAD 0.93

0.712

92.31

CAD 0.65

46.59

Minefinders (1)

CAD 6.96

0.319

9.20

CAD 4.35

31.08

Linear Gold (1)

CAD 1.12

0.024

13.04

CAD 1.15

11.65

Dynasty Metals

CAD 5.05

0.139

2.50

CAD 4.00

7.77

Romarco

CAD 0.33

0.052

54.00

CAD 0.38

15.93

Banro

CAD 1.50

0.073

10.00

USD 1.40

14.00

Anatolia

CAD 2.40

0.214

31.45

CAD 1.85

45.18

Lake Shore Gold (3)

CAD 1.31

0.216

30.62

CAD 1.55

36.85

Lake Shore Gold (3)

CAD 1.31

0.216

6.62

CAD 2.00

10.28

Colossus Minerals (1)

CAD 1.76

0.059

10.00

CAD 2.15

16.70

SALES OF UNDERLYING SHARES

Simmer & Jack (4)

ZAR 2.40

0.255

19.60

CAD 4.60

70.01

Anglo American (5)

GBP 10.16

18.551

N/A

N/A

434.00

Teck (6)

USD 2.87

1.370

N/A

N/A

110.00

Eldorado (7)

USD 8.11

3.001

N/A

N/A

70.00

NON-BANK DEBT

Newmont

USD 37.79

18.083

Convertibles

N/A

450.00

TOTAL

5283.49

(1) Sold units of one share and half a warrant.

(2) One share and one warrant.

(3) Two issue prices apply.

(4) Sold shares it owned in First Uranium.

(5) Sold shares it owned in AngloGold Ashanti.

(6) Various gold asset sales.

(7) Sale of São Bento to AngloGold Ashanti.

Source: Market & company information, compiled by Barry Sergeant