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Date : 22/08/2023

Newcrest Mining Ltd (ASX: NCM) Shares Defy Conventional Market Logic

The S&P/ASX 200 Index (ASX: XJO) experienced a muted drop in trading this Friday. Though the ASX 200 has shown signs of resilience since the initial drop after the market opened, the index has declined by 0.01%. However, today’s most intriguing story revolves around the Newcrest Mining Ltd (ASX: NCM) share price performance.

NCM: FY23 Results Highlights (In AUD)

NCM shares were trading at $24.99 and surged slightly during the day. The current market cap of the company is approximately 22.35 Billion AUD.

ASX NCM Shares News and Analysis
ASX NCM Shares News and Analysis
  1. Revenue: 4.51B, up 7.15% YoY
  2. Operating expense: 233.00M, down -13.06% YoY
  3. Net income: 778.00M down, -10.78% YoY
  4. Net profit margin: 17.26, down -16.74% YoY
  5. Earnings per share: 0.87, down -15.81% YoY
  6. EBITDA: 1.95B, up 1.14%
  7. Cash and short-term investments: 641.00M down -5.04%

NCM: Unanticipated Rise of Newcrest Shares

Despite the prevailing market trends, Newcrest shares are still catching up to the expected downward pressure. Against a declining global gold price, this ASX 200 gold miner has ascended today, showing an impressive 0.95% growth at $25.10 a share. This uptick is noteworthy, especially after the share closed at $24.86 just yesterday and had an opening price of $25.25 earlier today.

These surprising figures become even more intriguing when one considers that Newcrest (ASX: NCM) has recently traded ex-dividend for its forthcoming final shareholder payment. Typically, trading ex-dividend often signals a decline in share prices. But this has clearly not been the case with Newcrest.

NCM: Diving Deep into Newcrest’s Financials

Earlier in August, Newcrest announced its full-year earnings for the 2023 financial year. Despite a 7% surge in full-year revenue amounting to $4.5 billion, the company reported a 10.8% reduction in underlying profits, totalling $778 million.

Dividend enthusiasts, however, found a silver lining. Newcrest confirmed its final dividend for 2023 would be a fully-franked 20 US cents. When aggregated, Newcrest’s annual dividends for this fiscal year total 55 US cents – a 16% augmentation compared to last year’s payouts. As per current exchange rates, this dividend translates to roughly 31 cents per share for Australian investors.

However, potential Newcrest investors should take heed. Those who procure the company’s shares post today’s trading will not be entitled to the latest dividend payout, given today marks the company’s ex-dividend date. As per this timeline, dividends will be credited to the accounts of eligible shareholders by 18 September.

NCM: The Enigma of Rising Gold Shares in ASX 200

The global gold price is a potential contributor to this unexpected surge in gold stocks. But that theory falls flat. Gold prices experienced a dip recently, with the current rate being US$1,918.80 an ounce.

Moreover, it’s not just Newcrest experiencing this upward trajectory. Other ASX gold shares are also showing promising growth. Northern Star Resources Ltd (ASX: NST), Gold Road Resources Ltd (ASX: GOR), and Ramelius Resources Ltd (ASX: RMS) have all seen their sales climb by more than 1%. Silver Lake Resources Ltd (ASX: SLR) witnessed an even sharper rise, with their shares jumping by nearly 2%.

One plausible theory might be the vulnerabilities currently emerging from the Chinese economy. Speculations about the potential default of Chinese real estate behemoths, Evergrande and Country Garden are rife.

Traditionally, gold is considered a stable asset, particularly attractive during uncertain financial times. As fears and insecurities loom over financial markets, investors are likely gravitating towards gold and associated mining companies, potentially explaining Newcrest’s share price ascent despite its ex-dividend status.

Conclusion

In a day of unexpected turns, Newcrest Mining Ltd and several other gold-related stocks on the ASX 200 have exhibited resilience and growth, seemingly defying the established norms associated with ex-dividend trading and global gold price shifts. The fluctuations in these gold stocks might be tied to the turbulence in the Chinese economy, particularly concerning its real estate giants. Investors typically seek refuge in gold during financially uncertain times, so the shift towards gold stocks could indicate broader market apprehensions. While the precise factors influencing this surge remain multifaceted, today’s trading serves as a reminder of gold’s enduring appeal as a safe haven asset in tumultuous economic landscapes.

 

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