Performance drivers of JSE-listed gold mining companies

Abstract

Several researchers and practitioners have claimed that economic value added is superior to traditional accounting measures in driving shareholder value. Other researchers have refuted these claims by supplying data in support of traditional accounting indicators such as EPS and ROE. In light of these contradicting findings, the paper endeavoured to analyse the results of JSE-listed gold mining companies. The share price was correlated to EVA, ROE, EPS, CFG and gold price. Using simple and multiple regression analyses, the paper established the strength of correlation between these different performance drivers with the share price. It also established the impact of gold price on the correlation to share price. The results suggested that EVA had the strongest correlation with the share price, with a coefficient of determination r2 = 45%. It was followed by EPS which had a positive correlation, CFG and ROE. Results also revealed that the gold price had a positive and moderate influence on the share price. Not only that the gold price affected the share price moderately, the study found that it also affected the correlation between EVA, ROE, EPS, and CFG with the share price. The impact increased in magnitude from CFG, EVA, and ROE to EPS. Copyright