21. September 2020 | 07:22 CET
Grenke, JinkoSolar, Velocity Minerals - continue buying gold or are there alternatives?
Nowhere in the world, was more gold bought in the first six months of 2020 than in Germany. Coins and bars in the amount of about 83 tons went into the hands of the citizens. According to the World Gold Council, this represents an increase of 120% compared to the same period last year and equates to roughly EUR 4.4 billion in value. Those investors who do not want to be involved in the storage of gold, but still want a well-diversified portfolio with precious metal content, should look at shares in the value chain.
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ISIN: CA92258F3007 , US47759T1007 , DE000A161N30
Gold in Europe
Canadian exploration company Velocity Minerals is focused on the discovery and development of gold deposits in Bulgaria. The fact that the company operates within the structure and stability of the European Union should be considered a clear advantage. In August of this year, the Company released the results of a pre-feasibility study for the Rozino project, which confirmed open-pit mining as a viable option for future gold production. Last week, the Company was able to announce drill results from their Kazak Project which were encouraging. Kazak is located approximately two kilometres from Rozino. The development in the vicinity is important as it can positively influence and expand Rozino's planning.
"The discovery of gold mineralization at Kazak is important to the Rozino project because additional gold discoveries at proximity to a future processing plant at Rozino have the potential to add significant value to the project with relatively little investment," stated Keith Henderson, CEO of Velocity. "Velocity's exploration program has identified several exploration targets between Kazak and Rozino within a target corridor of five kilometres long by two kilometres wide. With an extensive exploration program in this area and other gold projects in the region, we aim to delineate additional gold resources that may fit into Velocity's hub and bespoke development model.
Q2 results eagerly awaited
The Chinese company JinkoSolar was founded in 2006 and is focused on the production and sale of solar cells, modules and mounting systems. On the stock exchange, JinkoSolar was able to surprise the capital market with a large order of 611MW from Vietnam, resulting in a move in the share price. The market capitalization was around USD 1.0 billion on Friday at a closing price of USD 24.50. Whether this rise in the share price will be sustainable will certainly be decided following the publication of the second-quarter results on September 23, 2020.
The stakes are high
The scandal surrounding the Wirecard bankruptcy has not yet been dealt with, and speculation about a possible new scandal is already breaking in on investors. This time it concerns the MDAX company, Grenke. The accusations made by the short-sellers cover several different criminal offences. While investors should be confident with the work of the auditors, the authorities and the Supervisory Board as a controlling body, the Wirecard scandal has proven to market players that all controlling bodies can fail.
Whether Grenke is now the victim of a defamation campaign or has been unmasked is not yet certain. What is obvious, however, is that trust in companies and their auditors have already dwindled as a result of initial suspicions. Meanwhile, investors are increasingly and probably justifiably asking themselves why short-sellers see more and understand critical relationships better than auditors and regulatory authorities. Grenke's share price opened the previous week at EUR 55.00 and fell to a low of less than EUR 24.00. A statement of the company ensured that the share could go into the weekend at around EUR 34.00. The confidence in the financial centre of Frankfurt is now at stake.