atans1

Glencore: Great GIC idea in ’09, ’11 but in ’15?

In Commodities, GIC on 13/08/2015 at 1:35 pm

How do you make a £2bn fortune from commodities? Answer: start with a £6bn fortune.

Ivan Glasenberg, chief executive of Glencore, won’t be laughing. Those numbers are the value of his shareholding in the mining and commodity-trading company at flotation in 2011 and now. Yes, Glencore’s share price really has fallen by two-thirds, from 530p to 180p, since it came to market with a fanfare. Among London’s big miners, only Anglo-American has done worse.

This week alone the fall has been 10% as the China-inspired rout has run through commodity markets and mining stocks. Glencore is being whacked harder than the likes of BHP Billiton and Rio Tinto for a simple reason – relative to earnings, it has a lot more debt.

http://www.theguardian.com/business/nils-pratley-on-finance/2015/aug/12/glencore-world-of-big-mining-agog-at-huge-fall

At the IPO in April 2011, GIC took  US$400m worth of shares, the second largest stake. The fund had already invested in Glencore through a convertible bond issued in 2009. At IPO time GIC was way ahead given that since the IPO had a market cap of US$62bn, it made a killing on its 2009 investment. https://atans1.wordpress.com/2011/04/15/gic-has-a-winner-with-glencore/

Update on @0August :

Glencore data

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  1. still a great idea… for a small country to still own a sizeable share in one of the world’s top 5 traders

    show me a commodities type entity that isn’t cyclical ? isn’t growing the market share of trading more important for a trader ?

    unless your point is : short term market timing for some fiat gains is crucial for a strategic entity like GIC, and they did not do it when they had the ability to ? ( which by definition means you believe the smartest men in the room be definition able to pick market tops and bottoms accurately )

    perhaps a more pertinent question should be : is the calibre of our people top 5 in the world ? and will we be ever globally competent enough to staff the ranks of glencore ?

    hoho

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