Market Report: Ivan the cerebral buys more Glencore

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The Independent Online

Pin money for multi-billionaire Glencore chief executive Ivan Glasenberg.That's how the Square Mile's finest practitioners were describing the South Africa-born trading tycoon's decision to snap up a further £10m of his huge dividend windfall on shares in his commodities giant yesterday.

The man whose brain is said to be as big as his wallet ($7bn, since you ask), went shopping for the second time in a week, nudging his stake in Glencore to near 16 per cent.

On the day when Glencore completed the acquisition of an 80 per cent stake in Namibian zinc miner Rosh Pinah — Glasenberg bought 2.8 million shares at a price of 356.6p each. That was a touch pricier than last week's splurge of 2.9 million shares at 344.3p each. Plenty more shopping is to come, since the metals man pocketed almost $110m in final dividends from his shares in Glencore and plans to spend all of that cash buying up shares in the company which is in the midst of a $30bn takeover of miner Xstrata (up 2.5 at 961.6p).

Glasenberg's spree might have been expected but the market still liked his confidence. IPO investors won't yet be celebrating — Glencore's massive £37bn float was priced at 530p a pop — but yesterday shares ticked up 3.1 per cent or 5.75p to 363.55p.

Less fortunate was Aquarius Platinum, after the precious metals digger admitted that the lower prices being commanded for its metal meant it was suspending some of its South African operations.

Aquarius — the world's fourth-biggest major platinum producer — reckons it will make more money in the long term by holding back some of its ore reserves at the Marikana mine until extraction was more lucrative. But the City isn't known for thinking long-term. Yesterday the shares fell eight per cent or 8p to 65.5p. Dominic Okane, metals analyst at Liberum Capital, said Marikana accounted for almost a fifth of the company's annual production, and warned: "Further closures are likely — specifically Everest which is around 30 per cent higher cost."

Banks had a bearable session, thanks to the €100bn (£80bn) hand-out to Spain's battered lenders over the weekend. All enjoyed strong early rallies, although those petered out as the cynics (for which read "realists" gained the upper hand in the court of City opinion. Lloyds Banking Group rose 0.5p to 28.5p. Barclays managed to hold on to some of its early gains to end up 0.2p at 190.55p. It had been more than 8p dearer before the profit-takers moved in after lunchtime. So to the poor old FTSE 100 index. After breaking the 5, 500 barrier early doors, the benchmark index closed down 2.71 points at 5432. It peaked at 5,536 in the morning but a glum Dow Jones Industrial Average opening in the afternoon meant it was always going to be a struggle to hold onto those gains.

Traders moaned, as ever: "Spain may be sorted but Greece isn't," said one morose suit. "Everyone I speak to says they're sitting on the sidelines until Greece sorts itself out. It's nice to have a day up but we could be down 150 tomorrow. It's a bit like the England game tonight, we've learnt not too expect too much."

It didn't take long for the trader to be proved right. Actually, said the City, Spain's news wasn't as good as it originally seemed. "Given the increase in its sovereign debt ratios and poor macro backdrop, we worry that full bailout by the autumn is still likely... We think the short squeeze will not last beyond a few weeks and would use the bounce as an opportunity to reduce exposure," Mislav Matejka, an analyst at JPMorgan said.

Positive broker comment helped lift media and events company UBM out of the mire, with a 1.5p bump up to 552.5p. Hats off to Morgan Stanley and Barclays on that score. The analysts at Morgan marked up their rating on the stock to "overweight" while the folks at Barclays upped their price targets on the shares.

Not so lucky in the broker note stakes was Bellway, the housebuilder, whose shares fell 11p to 781.5p after Deutsche Bank took a dim view of the stock, dropping its forecast for the longer term share price valuation from 977p to 936p. Still some way to go though

Insurance giant Aviva suffered similarly with a price target downgrade, this time from JPMorgan's finest. The shares fell 2.6p to 268.9p after Jamie Dimon's analysts said they were probably worth 436p, not the 498p they'd previously reckoned. However, they remain fans of the shares at these current levels, recommending punters keep them "overweight" in their portfolios.

FTSE 100 Risers

BP 414.9p (up 5.85p, 1.4 per cent) Oil giant benefits from the renewed appetite for "risk on" stocks — those that benefit from an improved global economic environment due to the Spanish bank bailout

Wolseley 2241p (up 30p, 1.4 per cent) Global building materials supplier benefits from Credit Suisse analysts' mention of stocks that could benefit from inflation, due to central banks easing policies.

FTSE 100 Fallers

ENRC 406.8p (down 17p, 4 per cent) Kazakhstan minerals miner suffers after RBC Capital Markets analysts downgrade it to "underperform". Their 12-month target price is 550p.

Man Group 76.7p (down 3.15p, 3 per cent) Hedge fund manager's shares suffer further selling pressure after mini-rally in May took it up from long-term lows. The firm is now heading back to those depths.

FTSE 250 Risers

Telecom Plus 797p (up 27p, 3.5 per cent) Telecoms firm rises amid growing confidence about its valuation. Marks the third straight session of gains, bringing the stock to its highest point since 3 January.

Genus 1271p (up 29p, 2 per cent) Bull-sperm specialist leaps amid continued positive sentiment highlighted by Liberum Capital's recent note raising its target price from 1,200p to 1,400p.

FTSE 250 Fallers

New World resources 306.3p, (down 19.8p, 6 per cent) Czech Republic's biggest coking coal producer plummets as profit takers sell up after enjoying a long stretch of gains in the share price.

Supergroup 280.5p (down 14.4p, 5 per cent). Owner of the Superdry fashion label plunges for a second day, meaning its shares are down more than 45 per cent so far this year, or 227p.

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