Analysis of Factors Affecting the Dynamics of the Value of Shares of Gold Mining Companies

The new COVID-19 viruses spread rapidly around the world at the beginning of 2020, which caused shocks in global stock markets, accompanied by increased demand for gold. This study is devoted to identifying the main factors affecting stock prices of gold mining companies, operating in Russia. The study analyzes 6 companies listed in Moscow and London stock exchanges for the period of the 1st quarter of 2020. This research methodology is based on the analysis of the results of the regression (pooled OLS regression with robust standard errors, fixed effects and random effects models) and event-study. In the regression analysis, five factors were identified: price to earnings ratio, dividend yield, capitalization, book value per share, Net Debt to EBITDA, as well as the price of gold and the dollar-ruble exchange rate. The results show that the main factors, that affect stock prices go gold miners in the 1st quarter of 2020, are the gold price and the exchange rat. A high R^2 revealed under all applied models further documents the significant impact of these variables on the market price of shares. Using the method of event study, some events were analyzed in order to identify the event that caused movements in the stock value in a greater or lesser way. Significant average abnormal returns were present only on February 28 due to investors' concerns about the spread of the virus outside of China. Event analysis also showed that one of the factors affecting the price of gold miners' shares is the movement of the market index.