China firm launches stock indices to tap into rush for safe-haven gold

Royal Gold

01/11/2023 08:11

SHANGHAI, Nov 1 (Reuters) - China's biggest index
provider launched on Wednesday two gold-linked stock indices to
cash in on surging demand for exposure to the safe-haven metal
amid a slump in the local real estate market and volatile global
markets.
    The new indexes  .CSI931493   .CSI931413 , launched by the
China Securities Index Co, include shares of global gold miners
such as Newmont Corporation  NEM.N  and Barrick Gold  GOLD.N .
    "The indexes offer a new method beyond traditional
strategies," the government-backed index company said in a
statement. "It provides the market with more tools to invest in
the gold business, and can help households better manage their
wealth."
    Spot gold  XAU=  has gained more than 8% so far this year,
rising to an almost six-month high of $2,009 an ounce last week.
In yuan terms  XAUCNH= , it is up more than 15% for the year so
far.
    Miners, which typically pay dividends, have also seen their
shares rise, with an index tracking China-listed gold miners
 .CSI930619  up nearly 15%, compared with an 8% drop in the
benchmark CSI300 Index  .CSI300  so far this year.
    "Gold is the brightest asset at the moment... promising much
better returns than Chinese property or the broad stock market,"
said Shihua Duan, general manager of Shanghai Changer Invest.
    "Gold shines as a safe haven against the backdrop of the
Ukraine war, economic woes and the Middle East conflict."
    The indices follow the launch of other Chinese gold-related
investment products that offer exposure in a country where gold
consumption in the first three quarters of 2023 climbed 7.32%. 
    China Asset Management Co and Maxwealth Fund Management Co
last month launched China's first exchange-traded funds (ETFs)
 517520.SS  that invest in gold stocks. Another seven mutual
fund companies have applied to launch similar products.     
    "Buying the gold bar is the safest among so many investment
choices," said gold investor Jack Liu, who spent 230,000 yuan
($31,425) on a gold bar in September.
($1 = 7.3190 Chinese yuan renminbi)

 (Reporting by Jason Xue and Samuel Shen, in Shanghai and Summer
Zhen in Hong Kong, and Beijing Newsroom; editing by Miral Fahmy)
 ((Jason.Xue@thomsonreuters.com))