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Good news for some in Glencore’s bounce back

Outlook

James Moore
Thursday 05 November 2015 02:33 GMT
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Glencore's headquarters in Baar, Switzerland
Glencore's headquarters in Baar, Switzerland (Getty)

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There are reasons to be cheerful for shareholders in Glencore, the FTSE 100 natural resources company which is about as British as the Alps that you can hop, skip and jump over to after enjoying the tax free charms of its true home, the Swiss canton of Zug.

The millionaire factory – so named for the number of gauche young traders the company has made worthy of that designation – has told the market their efforts have been integral to improved trading that should see it bring in between $2.5bn (£1.6bn) and $2.6bn of earnings for the year.

This is significantly better than what JP Morgan, for one, was forecasting. Shareholders were cock-a-hoop at the news. They’ve already shown that they like the other measures that are being taken to restore the group’s financial clout. Their bombed-out stock positively jumped for joy after the announcement.

Glencore’s traders have good cause to be happy too: they’ll no doubt be handsomely rewarded for their efforts. The same goes for management, and especially billionaire founder, chief executive and driving force Ivan Glasenberg.

Even the Government of Zug will be happy that one of its most important corporate residents has cheered up.

Where’s the “but”, you’re probably saying at this point. Well, there’s the small matter of several thousand African copper miners who’ve lost their jobs as a result the company’s decision to mothball their employers in an attempt to add a little lustre to that metal’s price. But financial markets aren’t much interested in their plight. Sadly, they’re not alone in their indifference.

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