An examination of Australian gold mining firms' exposure over the collapse of gold price in the late 1990s

Purpose – The purpose of this study is to examine the exposures of Australian gold mining firms in the highly volatile period from 1995 to 2000. This period has been characterized by significant changes in gold price due to bulk sale of gold by collective central banks. Specifically, the paper aims to investigate several firm-specific factors that are hypothesized to carry substantial influence on gold beta.

Design/methodology/approach – To estimate gold beta, we use the following multifactor model: R_g,_t = a+ß_gGPR_t + ß_xFXR_t + ß_mR_m,_t + _Et , where R_g,_t is the return on the gold stock Index at time t, GPR_t is the gold price return denominated in US dollar at time t, FXR_t is the foreign exchange return of Australian dollar in terms of US dollar at time t, R_m,t is the market return at time t, and _Et is the random error term at time t.

Findings – The paper finds that the values of gold beta are consistently greater than one, implying the sensitive nature of firms’ stock returns to gold price changes. This also suggests that investors holding gold mining stock would receive higher percentage increases in stock returns from a percentage increase in gold price returns, as opposed to investors holding gold bullion. Furthermore, these values have changed substantially over time with significant changes in gold price volatility. The most important and consistent relationship that we find is the impact of firms’ hedging behavior on their respective gold betas. This is consistent with Tufano’s study. It implies that firms, which hedge a greater proportion of their gold reserves, are less sensitive to movements in gold prices. The finding therefore supports the risk management theory that hedging increases shareholder’s wealth. However, cash operating costs, cash reserves and the level of gold production seem to influence very little on the firms’ exposure to gold price changes.

Originality/value – This study is of interest and important to the stock mining companies and investors because the extent of the effect of gold price movements on the stock returns of gold mining companies has significant impacts on returns for both firms and investors especially in their risk management and investment decisions, respectively.

Caveolin-1 Is Necessary for Hepatic Oxidative Lipid Metabolism: Evidence for Crosstalk between Caveolin-1 and Bile Acid Signaling

Caveolae and caveolin-1 (CAV1) have been linked to several cellular functions. However, a model explaining their roles in mammalian tissues in vivo is lacking. Unbiased expression profiling in several tissues and cell types identified lipid metabolism as the main target affected by CAV1 deficiency. CAV1−/− mice exhibited impaired hepatic peroxisome proliferator-activated receptor α (PPARα)-dependent oxidative fatty acid metabolism and ketogenesis. Similar results were recapitulated in CAV1-deficient AML12 hepatocytes, suggesting at least a partial cell-autonomous role of hepatocyte CAV1 in metabolic adaptation to fasting. Finally, our experiments suggest that the hepatic phenotypes observed in CAV1−/− mice involve impaired PPARα ligand signaling and attenuated bile acid and FXRα signaling. These results demonstrate the significance of CAV1 in (1) hepatic lipid homeostasis and (2) nuclear hormone receptor (PPARα, FXRα, and SHP) and bile acid signaling.