Glencore Share Discussion Threads

[leoneobull] 05/12/2018 15:08

Agreed. Brexit and the trade wars are creating many uncertainties

[maywillow] 05/12/2018 14:50

Trafigura
Brazilian Car Wash scandal draws in Glencore and Trafigura

Commodity giants under investigation as police move focus to Petrobas fuel-trading deals

Rob Davies
@ByRobDavies

Wed 5 Dec 2018 13.56 GMT
Last modified on Wed 5 Dec 2018 13.58 GMT

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Incoming justice minister Sergio Moro attends a forum with the word 'corrupçào
New justice minister Sergio Moro at a national forum on fighting corruption. Photograph: Carl de Souza/AFP/Getty Images

Oil deals by the commodity trading giants Glencore, Vitol and Trafigura are under investigation as part of the Car Wash investigation, the vast corruption scandal that has rocked the Brazilian establishment.

Federal police in Brazil said they had been examining alleged bribery involving Petrobras, the huge national oil company that has been at the centre of the Car Wash affair.
Operation Car Wash: Is this the biggest corruption scandal in history?
Read more

The investigation has already led to the imprisonment of one former president, as well some of the country’s most prominent business figures.

Glencore, Vitol and Trafigura, all of which have strong ties to London, are the subject of the next phase of the Car Wash investigation, dubbed “Operation Without Limits”, according to federal authorities in Brazil.

It comes a month after the Guardian questioned the three firms about a report by the campaign group Global Witness that called for enforcement bodies in the UK and the US to probe their connections to businessmen named in the vast corruption scandal.
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Police said they were looking into suspected bribery of Petrobras officials, amounting to more than $15m and linked to more than 160 fuel trading deals between 2011 and 2014.

A 190-strong team of police in Rio de Janeiro and the state of Parana have issued 37 judicial orders, 26 search warrants, 11 pre-trial arrest warrants and six subpoenas.

Glencore declined to comment. Trafigura said it did not comment on legal matters. Vitol has not yet responded to a request for a comment.

[sarkasm] 05/12/2018 13:13

Glencore
290.7 -2.12%

[montyhedge] 05/12/2018 09:15

It's the uncertainty. Investors hate uncertainty.

[purplepanther] 05/12/2018 08:29

Spot illustrative free cash flow generation of c.$7.5bn from EBITDA of c.$17.1bn - that's a near 15% yield and should limit more downside here

[grupo guitarlumber] 04/12/2018 20:13

Vale, Glencore to jointly explore for nickel in Canada
By Frederico Barbosa
Tuesday, December 4, 2018

[waldron] 04/12/2018 16:47

0
04/12/2018 | 10:55
Barclays Capital (BarCap) reaffirms 'overweight' recommendation on Glencore, but lowers price target by 7.5% to 370p, on the back of reduced EBITDA estimates of 7%, 8% and 9% respectively the years 2018 to 2020.

If the investor meeting was slightly disappointing, the broker underlines management's commitment to 100% free cash flow generation, which implies that at least 14% of the market capitalization must be redistributed to them. in 2019.

'Putting Glencore's mining assets on the same PE multiples as Anglo, BHP and Rio Tinto means that the trading business is trading on a seven-fold PE in 2019, which we still think is expensive,' says BarCap.

[waldron] 04/12/2018 16:14

EXTRACT MOTELYFOOL



Is the Glencore share price a buy or should I grab FTSE 100 faller Ferguson?

Roland Head | Tuesday, 4th December, 2018 | More on: FERG GLEN
Image source: Getty Images.

Many cyclical stocks have fallen sharply over the last couple of months, as investors have taken a cautious view on global growth. Today, I’m going to look at two big fallers from the FTSE 100.

The first is mining and commodity trading group Glencore (LSE: GLEN). The group’s share price has fallen by 23% so far this year, leaving it lagging far behind rivals such as Rio Tinto (-7%) and BHP (+3%).

One reason for this is that Glencore has been hit by a US Department of Justice investigation into its operations in the Democratic Republic of Congo. But the group’s financial performance has remained strong. I’m not sure the stock deserves such a big discount to rivals.
Too cheap to ignore?

Glencore’s recent trading results certainly suggest to me that this business is firing on all cylinders. During the first half of the year, adjusted operating profit rose by 35% to $5,119m. The group’s funds from operations — a measure of cash generation — rose by 8%, from $5,201m to $5,625m.

Market conditions are fairly favourable for most major commodities, and the firm’s management appears to have been taking advantage of this. Production of copper rose by 12% to 1,063,100 tonnes during the third quarter. Nickel, zinc and coal also logged increases.

Analysts expect earnings to rise by 20% to $0.49 per share in 2018, providing generous earnings cover for the forecast dividend of $0.21 per share. These forecasts put the stock on a 2018 price/earnings ratio of 7.8, with a 5.4% dividend yield. In my view, that’s cheap enough to factor in the risks faced by the firm. I’d rate the shares as a buy at this level.

[adrian j boris] 04/12/2018 15:23

Glencore Makes a $36 Billion Bet on Dirty Coal

CEO thinks shareholders are missing the picture on Glencore’s strong cash flow. If you’re happy with investing in coal, he may have a point.
By Chris Bryant
4 décembre 2018 à 10:40 UTC+1

Coal may be killing the planet, but it's still a license to print money for some. Photographer:
Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.
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Follow @chrismbryant on Twitter
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GLEN
GLENCORE PLC
296.20
GBp
-4.60-1.53%
XW1
Generic 1st 'XW' Future
103.40
USD/MT
+0.10+0.10%
HG1
Generic 1st 'HG' Future
279.80
USd/lb.
-1.15-0.41%

Higher U.S. bond yields have made the payouts offered by most stocks look pretty underwhelming lately. Not so Glencore Plc, whose implied yield is startlingly high even though it’s throwing off cash like it’s going out of fashion.

The miner-cum-trader thinks it can generate $7.5 billion of free cash flow next year at current commodity prices. Absent a downturn in the economy, it’s conceivable that the company will return all of that to shareholders via dividends and buybacks, it said on Monday. Here’s the relevant slide:
Source: Glencore

The market shrugged at its largess, even erasing some of the gains Glencore had enjoyed from the easing of U.S.-China trade tensions. The shares have dropped more than 21 per cent this year and trade on less than 8 times estimated earnings.
Cash Puzzle

Glencore's shares have faded even as prospects for cash returns have increased

Source: Bloomberg

Glencore’s cash flow projection indicates a whopping 14 percent yield – the amount investors get back as a percentage of the share price – should it indeed return all of the cash via dividends and buybacks. The company is poised to generate almost half its market value in cash in just three years, according to the Bloomberg consensus forecast. So why aren’t shareholders clamoring for a slice of the spoils?

Demand for Glencore’s commodities remains pretty robust and miners have been more reluctant to do the expansionary capital spending that got them into trouble in the past. Net debt has declined enough to let Glencore hand back heaps of cash to shareholders. Hence, chief executive Ivan Glasenberg thinks Glencore’s valuation handicap boils down to two issues. First, there’s the Democratic Republic of Congo, where Glencore has large copper and cobalt assets and has faced of string of government and legal problems. And then there’s coal.

There’s not much Glasenberg can do about a new Congolese mining code that penalizes foreign producers, other than keep appealing for a better settlement. Nor does the company have any influence over a U.S. Justice Department probe into possible corruption and money-laundering in the DRC, Venezuela and Nigeria. But even if Glencore is whacked by a fine from Washington, it’s questionable whether it will be anywhere near the $5 billion wiped off the stock when the subpoena landed in July.

A bigger impediment, in valuation terms at least, is that investors aren’t willing to ascribe full value to Glencore’s thermal coal business. The company anticipates almost $6 billion of Ebitda from coal in 2019, more than it will generate from copper at current prices. Apply a typical deal multiple and the coal business is worth about $36 billion, thinks Glasenberg. That’s close to half the company’s enterprise value.

With international delegates meeting in Poland this week to debate the unfolding planetary climate emergency, it’s tempting to view the market’s thumbs down on coal as ethical. Glencore talks a lot about the copper and cobalt it will supply for electric vehicles, but it’s made a huge bet on carbon. Some sustainability-minded investors won’t touch Glencore's shares for this reason, but that’s probably not why the coal business has been marked down. Rather, investors worry that high thermal coal prices aren’t sustainable. It’s possible they’re wrong about that. Glasenberg certainly thinks so.
Clingy Carbon

Coal prices have remained pretty buoyant, benefiting producers like Glencore

Source: Bloomberg

Corporate boards and banks are increasingly unwilling to sanction or finance new coal mines, meaning there’s a dearth of new supply. That’s a huge advantage for miners that refuse to quit the coal game. In particular, Glencore profits from the premium that utilities pay for higher grade coals. With India and China constructing lots of new coal capacity, demand isn’t about to fall off a cliff either, whatever climate campaigners hope.

In the long run, high prices may end up dooming coal, as my colleague David Fickling has argued. But Glencore’s coal business should be a license to print money for several more years. If Glasenberg is right, his shareholders will be swimming in cash, even as our oceans creep higher.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Chris Bryant at [e-mail]

To contact the editor responsible for this story:
James Boxell at [e-mail]

[sarkasm] 04/12/2018 12:30

Canada's top stock-market regulator is aiming to settle a long-standing probe with Glencore PLC's Katanga Mining Ltd. by the end of the month, according to people familiar with the matter.

The Wall Street Journal first reported the Ontario Securities Commission, or OSC, was probing more than $100 million in payments Katanga Mining made to a company owned by Israeli businessman Dan Gertler.

OSC investigators were probing financial statements and disclosures by Toronto-listed Katanga related to possible breaches of bribery and anticorruption laws, Glencore later said.

Glencore in July said it had received a subpoena from the U.S. Justice Department, which was demanding records related to its compliance with American antibribery and money-laundering laws in Congo, Nigeria and Venezuela. Glencore didn't provide details and has declined to comment more broadly on the subpoena.

Following the disclosure of the subpoena, the Journal reported that U.S. investigators are focused in part on Glencore's ties with Mr. Gertler, a former co-investor with Glencore in its two Congolese copper operations, including Katanga Mining, citing people familiar with the situation.

Mr. Gertler has repeatedly denied wrongdoing. A representative for Mr. Gertler declined to comment.

Separately, Glencore said Monday its head of copper trading was stepping down. Glencore said Aristotelis Mistakidis, who at one point also ran its copper mining operations in Congo, will leave the Swiss commodity giant at the end of the year.

A spokesman for Glencore declined to comment. Mr. Mistakidis didn't immediately respond to a request for comment.

Mr. Mistakidis for years oversaw mining and trading of copper at Glencore, one of the world's biggest copper producers. He helped set up a pair of giant copper-mining businesses in Congo that have become among the biggest revenue generators for Glencore.

In the process, he became one of Glencore's most senior executives, often seen as No. 2 to the company's chief executive, Ivan Glasenberg. He also became a multibillionaire due to his large holding of Glencore stock.

Mr. Mistakidis had previously stepped down from Katanga Mining's board following an internal review that Glencore said found "material weaknesses" in the company's controls over financial reporting.

Nico Paraskevas, a senior copper trader at Glencore, will replace Mr. Mistakidis.

In December 2017, the U.S. Treasury Department sanctioned Mr. Gertler, alleging he traded on a friendship with Congo President Joseph Kabila to amass a fortune through "opaque and corrupt" deals on behalf of multinational companies seeking to do business in Congo. Mr. Gertler has declined to comment on the Treasury allegations and Justice Department probe.

Write to Scott Patterson at [e-mail] and Ben Dummett at [e-mail]



(END) Dow Jones Newswires

December 03, 2018 10:45 ET (15:45 GMT)

[sarkasm] 04/12/2018 12:27

Canada's top stock-market regulator is aiming to settle a long-standing probe with Glencore PLC's Katanga Mining Ltd. by the end of the month, according to people familiar with the matter.

The Wall Street Journal first reported the Ontario Securities Commission, or OSC, was probing more than $100 million in payments Katanga Mining made to a company owned by Israeli businessman Dan Gertler.

OSC investigators were probing financial statements and disclosures by Toronto-listed Katanga related to possible breaches of bribery and anticorruption laws, Glencore later said.

Glencore in July said it had received a subpoena from the U.S. Justice Department, which was demanding records related to its compliance with American antibribery and money-laundering laws in Congo, Nigeria and Venezuela. Glencore didn't provide details and has declined to comment more broadly on the subpoena.

Following the disclosure of the subpoena, the Journal reported that U.S. investigators are focused in part on Glencore's ties with Mr. Gertler, a former co-investor with Glencore in its two Congolese copper operations, including Katanga Mining, citing people familiar with the situation.

Mr. Gertler has repeatedly denied wrongdoing. A representative for Mr. Gertler declined to comment.

Separately, Glencore said Monday its head of copper trading was stepping down. Glencore said Aristotelis Mistakidis, who at one point also ran its copper mining operations in Congo, will leave the Swiss commodity giant at the end of the year.

A spokesman for Glencore declined to comment. Mr. Mistakidis didn't immediately respond to a request for comment.

Mr. Mistakidis for years oversaw mining and trading of copper at Glencore, one of the world's biggest copper producers. He helped set up a pair of giant copper-mining businesses in Congo that have become among the biggest revenue generators for Glencore.

In the process, he became one of Glencore's most senior executives, often seen as No. 2 to the company's chief executive, Ivan Glasenberg. He also became a multibillionaire due to his large holding of Glencore stock.

Mr. Mistakidis had previously stepped down from Katanga Mining's board following an internal review that Glencore said found "material weaknesses" in the company's controls over financial reporting.

Nico Paraskevas, a senior copper trader at Glencore, will replace Mr. Mistakidis.

In December 2017, the U.S. Treasury Department sanctioned Mr. Gertler, alleging he traded on a friendship with Congo President Joseph Kabila to amass a fortune through "opaque and corrupt" deals on behalf of multinational companies seeking to do business in Congo. Mr. Gertler has declined to comment on the Treasury allegations and Justice Department probe.

Write to Scott Patterson at [e-mail] and Ben Dummett at [e-mail]



(END) Dow Jones Newswires

December 03, 2018 10:45 ET (15:45 GMT)

[sarkasm] 04/12/2018 10:24

OPTIMUM COAL
Glencore willing to testify at state-capture inquiry, says CEO Ivan Glasenberg
04 December 2018 - 05:10 Lisa Steyn
Glencore CEO Ivan Glasenberg. Picture: BLOOMBERG/ANDREY RUDAKOV
Glencore CEO Ivan Glasenberg. Picture: BLOOMBERG/ANDREY RUDAKOV

Resources giant Glencore is prepared to testify at the state capture commission of inquiry about its experience with its former Optimum Coal, which ended up in the hands of the Gupta family, according to CEO Ivan Glasenberg.

Optimum Coal, a supplier to Eskom, was a key battleground in the attempt by private interests to capture the state.

The change of ownership from Glencore to the Guptas, friends of former president Jacob Zuma, who stand accused of using links with him to further their business interests, was central to the findings of the public protector, which led to the formation of the Zondo commission of inquiry.

Speaking on a conference call on Monday, SA-born Glasenberg said the diversified miner was willing to share its experience as a former owner of Optimum Coal.

“If called upon to talk about the experience, we would be willing to do so,” he said.

Commission chair, deputy chief justice Raymond Zondo, has pleaded for witnesses to come forward. SA banks have testified that they came under immense pressure to keep Gupta bank accounts open, after they decided to close them due to suspicious transactions.

So far, the witness testimony has been largely from public officials.

Former mineral resources minister Ngoako Ramatlhodi told the commission last week how Zuma removed him from his post in 2015 after he refused to revoke Glencore’s mining licences, as was allegedly demanded of him by then Eskom chair Ben Ngubane.

Eskom reinstated a disputed R2bn penalty on Optimum for supplying substandard coal, which forced Glencore to put the mine into business rescue.

After that, it was acquired by the Gupta family’s Tegeta Exploration and Resources.

In former public protector Thuli Madonsela’s “State of Capture” report it was found that former Eskom executives had advanced the Guptas R600m to help them acquire the mine.

In February, Optimum and eight other Gupta-linked entities were placed under business rescue — a provision in law for the rehabilitation of distressed companies. As part of the rescue plan, Optimum is now up for sale, and it is expected that a deal could be concluded before the end of 2018. Glasenberg, however, said that Glencore was “not making any moves” to acquire Optimum again.

Meanwhile, Eskom, which supplies virtually all of SA’s energy needs, is facing a coal-supply crunch that has contributed to the return of load shedding, with devastating repercussions for the SA economy.

Ten out of Eskom’s 15 coal-fired power stations do not have sufficient coal stocks.

Glencore had stepped in to help plug the supply gap, Glasenberg said.

“It’s clear they require more coal. We are doing whatever we can to assist.”

[e-mail]

[montyhedge] 04/12/2018 08:05

The Congo boss stepping down wonder why?

[waldron] 04/12/2018 08:02

20/11/2018 Broker: Deutsche Bank Rating: Buy Old Target: GBX 450.00 Maintain

19/11/2018 Broker: JP Morgan Rating: Neutral Old Target: GBX 340.00 New Target: GBX 340.00 Maintain

19/11/2018 Broker: Barclays Capital Rating: Overweight Old Target: GBX 400.00 Maintain

07/11/2018 Broker: UBS Rating: Neutral Old Target: GBX 360.00 Maintain

07/11/2018 Broker: Liberum Capital Rating: Hold Old Target: GBX 300.00 Maintain

31/10/2018 Broker: HSBC Rating: Buy Old Target: GBX 420.00 New Target: GBX 450.00 Maintain

31/10/2018 Broker: RBC Capital Markets Rating: Outperform Old Target: GBX 350.00 Maintain

[bubloo] 04/12/2018 07:39

Listening to investor update it appears they will be buying back a billion worth of shares every quarter in 2019. Hope that teflects in a rise on share price. ?? What should be the upside in that case. Any comments from the learned lot here

[bubloo] 04/12/2018 07:36

Looks like they will buy back a billion worth of shates every quarter in 2019

[grupo guitarlumber] 04/12/2018 06:56

Leo

try to post a little more about good old glencore please

[leoneobull] 04/12/2018 06:30

https://www.theguardian.com/business/nils-pratley-on-finance/2018/dec/03/trumps-trade-war-truce-with-china-fragile-and-hurdle-strewn3 months....