Why investors are turning their backs on Glencore – The Economist

EDINBURGH — Investors who bought Glencore shares at the time have lost 48% of their money since 2011 — a worse return than any of its big ftse mining peers except for Anglo American, says The Economist. The company's chief executive Ivan Glasenberg failed to spot a commodities-price wobble coming in 2015, which in turn required a humbling $2.5bn capital infusion to fix the balance-sheet, it says. After recovering, shares have slipped again since the start of 2018 and trade at just 7.3 times this year's estimated earnings, notes the respected business and finance journal. Its analysts size up Glencore's rise to become a major mining company and caution that current troubles don't bode well for the business. – Jackie Cameron 

By Thulasizwe Sithole

Once a commodities trader, in recent years Glencore has been shaping itself as a global mining company competing with the likes of Rio Tinto and Anglo American. But Glencore is losing its lustre for investors. The Economist explains why, pointing to questionable business practices and a bad smell lingering over its Africa operations.

"Glencore's dealings in Congo have landed it in a hole as deep as Kamoto. Authorities in America, Canada and Britain are probing whether its executives, known in the industry for their sharp suits and elbows, deployed even sharper business practices to get ahead. Investors have started to question the firm's prospects; its share price has slumped.

"Mining firms once encouraged to emulate Glencore's aggressive culture now wonder whether their old-fashioned approach might not have more merit after all."

___STEADY_PAYWALL___