MARKETS SPECTATOR: Newcrest defends itself

On June 4 UBS decided Newcrest Mining shares were a “sell”. That day the stock rose 3 cents, or 0.2 per cent, to $15.15.

The next day, June 5, Citigroup recommended investors sell Newcrest shares, as did Credit Suisse which changed its rating on the stock to “underperform”. The stock fell 80 cents, or 5.3 per cent, to $14.35.

On June 6 Newcrest shares fell a further 99 cents, or 6.9 per cent, to $13.36. The next day, June 7, the stock dropped $1.01, or 7.6 per cent, to $12.35, after the company announced, prior to the ASX opening trading, it might write down as much as $6 billion of the value of its assets because of the fall in the gold price.

On June 7 the ASX’s principal adviser on listing compliance, Dean Litis, asked Newcrest if the company had complied with the market’s immediate disclosure rules, to explain the analyst downgrades and to account for the 12 per cent decline in its share price on June 5 and 6.

Today Newcrest said in an ASX statement it “treats its disclosure obligations seriously and engages with the investment community in a manner consistent with these obligations”.

Newcrest spokeswomen Kerrina Watson referred Market Spectator to the above statement when asked if the company held meetings with analysts prior to the June 7 company announcement of a $5 billion to $6 billion writedown.

Newcrest says its board met last week to approve the 2014 budget. The company’s board also met to consider its 2013 accounts and following a decision on the budget and accounts on June 7 issued an ASX statement that morning before the market opened.

Newcrest shares at 1103 AEST had fallen 11 cents, or 0.9 per cent, to $11.92. The stock has dropped 21 per cent since June 5. Meanwhile at 1103 AEST, the S&P/ASX200 Index was down 33.960, or 0.7 per cent, to 4,723.10.