Glencore Stock Rose As Much As 72% In Hong Kong As Investors Hope For Golden Exit
- Shares of Glencore International PLC, St Helier (OTC: GLCNF) rose more than 10 percent Monday morning.
- Glencore's Hong Kong listed equity surged higher by 72 percent before selling off but still finished the day higher by 17.76 percent.
- Unconfirmed news reports suggested that Glencore may be exploring a sale of its agriculture business.
Shares of Hong Kong listed Glencore surged higher by more than 72 percent on Monday before selling off and ending the session higher by 17.76 percent. The company's London listed equity was higher by more than 8 percent at 10:18 a.m. ET while the OTC equivalent was higher by 9.21 percent at $1.66 at the same time.
The surge in Glencore's stock was attributed to unconfirmed reports that the company may be in talks with potential buyers for its agriculture business. However, Bloomberg noted that the company said in a statement that it wasn't aware of any reason for the move in its stock, nor does it have any information and news that it would be obliged to disclose.
Despite the company's statement, Bloomberg reached out to James Wilson, a senior analyst at Morgans Financial in Australia. The analyst said, "It's definitely looking well-bid and if it's distressed in terms of Glencore's balance sheet then it's going to get a lot of interest. The agricultural sector is extremely well looked-at at the moment."
Shares of Glencore have been hit especially hard in recent weeks amid ongoing global financial concerns, especially in China. Hunter Hillcoat, a commodity analyst at Investec commented in a note on September 28 that Glencore faces an "almost complete collapse" in forward earnings to the point where "no meaningful estimate of shareholder value" can be derived. The analyst even suggested that the company's heavy debt load could represent 100 percent of the total enterprise value and the company will solely be operating to repay its debt obligations.
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