He who sups with Glencore should have a long spoon
Thursday 21 August 2014
Outlook Glencore is often portrayed as the pantomime villain not just of the grasping, greedy commodities sector but also of the wider financial markets.
Ivan Glasenberg, its architect and chief executive, is after all horribly rich (circa $6.8bn – £4bn – according to Bloomberg) and getting wealthier (a dividend cheque for $66m on the way shortly). He’s not exactly cuddly on the conference calls with journalists and analysts. And he likes his privacy.
So it came as something of a surprise when a Glencore watcher pointed out that yesterday’s promise to buy back $1bn of its own shares means it will have handed more back to shareholders than it actually raised in fresh capital when it floated in May 2011.
Not bad, particularly given last year’s $29bn takeover of rival Xstrata and the seemingly endless appetite mines have for capital expenditure.
Of course Glencore shareholders (and Mr Glasenberg is the second largest of them) have not done so well since the float. The shares are 32 per cent down on their 530p float price. If you believe Mr Glasenberg’s tale that after almost five years zinc, nickel and coal are at last moving back from over-supply to under-supply while demand is still rising or at worst constant, it could be a sound time to buy the shares.
Certainly Mr Glasenberg appears rather more astute than his oppos at BHP Billiton and Rio Tinto in deciding to give shareholders what they want before they start calling for heads to roll. Glencore is the first big miner to come up with a share buyback this time round in the cycle, but it won’t be the last. It is also lining up some fairly impressive dividend growth, assuming earnings grow as well as planned.
So by all means jump aboard. But remember: he who sups with arch capitalists should have a long spoon.
- 1 Cyclist who knocked down three-year-old girl says his life has been 'destroyed'
- 2 A politically correct lefty goes to see Top Gear live – you'll probably believe what happened next
- 3 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
- 4 Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
- 5 Snoop Dogg on why he doesn't regret displaying misogyny towards women
Cyclist who knocked down three-year-old girl says his life has been 'destroyed'
Woman accidentally shoots herself in the head while posing for a selfie
How China's richest man Li Hejun lost $15bn in an hour - and made a fortune
Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Snoop Dogg on why he doesn't regret displaying misogyny towards women
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Gay marriage 'Bert and Ernie' cake bakery found guilty of discrimination in Northern Ireland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...