Glencore Shares Crash After Commodity Price Forecasts

Shares in commodity giant Glencore plunged almost 30% after analysts raised fears about lower metal prices.

The company’s shares dropped to a new record low of 69p on Monday, helping push the FTSE 100 down 2%.

Analysts warned slumping metal prices could leave Glencore shares almost worthless because of its heavy debts.

Fears over Glencore’s £20bn debt pile have seen its shares drop more than 30% in the past month.

More than £3.5bn was wiped off Glencore’s market value after a warning from analysts at Investec.

They wrote that low metals prices “could see almost all equity value eliminated” at the Switzerland-based company.

They also questioned how much Glencore could raise from selling its agriculture division, as “valuing such a volatile business is likely to be tough”.

Glencore hopes to generate up to $12bn (£7.9bn) from the sale of its grains business to reduce its debt burden.

via BBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza