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25 September 2015
Shares in Glencore (GLEN) safely back above 100p this morning after multiple tests this week on continued backlash to the a 2.5bn share placement which, whilst doing the job of reducing the $30bn debt pile, didn’t go down well with shareholders (no first refusal? No rights issue?). The gap higher comes after hawkish commentary by Janet Yellen versus last week’s dovishness and in spite of the threat of new commodity regulations and greater trading oversight which could hit profits. Despite the USD having almost regained September highs, commodities (USD denominated) are pretty stable this morning.
Can we assume markets slowly coming round to the idea of higher US interest rates within the next year as policy normalises, in the US at least. Is a Fed ‘slightly’ less worried about external factors (read China) this week soothing market nerves? Or are we convinced about more stimulus from the BoJ and ECB keeping the highly accommodative stimulus ball in the air, appeasing cheap money addicts? Share price gains checked at 105p by falling resistance from last week’s peak, and a mountain of work to do before recovery to May’s 315p highs. However, the highs from whence we have fallen just make the stock all the more attractive and boost the bargain-hunting interest we see in the battered miner around that key round number 100p.
Mike van Dulken, Head of Research
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