Record gold makes Chinese Zijin Gold shine: +69% on stock market debut

Adding fuel to the fire of a rally that seems to find new ideas every day, not only to continue but even to intensify, was the 'shutdown' alarm: the forced closure of federal offices in the US, which was feared to have been triggered as early as midnight on Tuesday 30 in the absence of an agreement in extremis on the budget law.

Compared to similar situations in the past, investors have more reason for apprehension today, not only because of the harsh contrasts between Republicans and Democrats and the threats of mass lay-offs by President Donald Trump, but also because the Department of Labour has let it be known that the publication of the monthly employment report, scheduled for Friday 3 October, from which the market expects clarity on the Federal Reserve's next monetary policy moves, is likely to be missed. A shutdown could also induce rating agencies to lower the US credit rating, as Moody's already did in May.

Record gold price increases have also reawakened interest in gold stocks, long neglected by investors. Zijin was listed at a price that was considered cheap, undervaluing it by 28% compared to the average of companies in the sector, according to Leung, the Bloomberg Intelligence analyst. And also for this reason the IPO - postponed by one day due to Typhoon Ragasa - was a great success.

The tranche offered to institutional investors was subscribed 20.4 times, the retail tranche even 241 times. In all, 349 million shares were placed, with a unit value of HK$71.59, which had already risen to HK$120.6 in the first trading session (with peaks of up to HK$123 during the course of it).

The interest of the financial community is also confirmed by the large number of cornerstone investors, those institutional investors who reserve significant stakes in an IPO with a commitment to hold them for at least six months. Zijin has placed half of the stake earmarked for the IPO - worth around USD 1.6 billion - with a group of cornerstones that includes prestigious names such as GIC (Singapore's sovereign wealth fund), BlackRock, Fidelity International, Schroders, Oaktree, Millennium Management and Hillhouse Investment. Morgan Stanley and Citic Securities are joint sponsors of the offering.

In the transaction prospectus, the company stated that it will use part of the capital raised from the IPO to purchase the Raygorodok gold mine in Kazakhstan, while the rest will be used to expand its mining operations over the next five years, particularly in Ghana and Suriname.

Zijin Gold was spun off for listing by Zijin Mining Group, which gave it gold mines outside China. The company - still controlled by the parent company with an 87% stake - operates in Central Asia, Australia, Africa and South America, with gold production of 1.3 million ounces (40.4 tonnes) in 2024.

Last year it more than doubled its net profit to USD 481.4 million on a turnover of USD 2.99 billion (+32%).

Its stock market valuation is now comparable to that of Antofagasta, the historic Anglo-Chilean copper-focused group, while Zijin Mining Group recently passed the $100 billion mark in capitalisation: among the mining biggies, only Bhp and Rio Tinto are worth more.