Market Report: Glencore's roller-coaster slows as Teck deal brings it back to earth

Comments Off on Market Report: Glencore's roller-coaster slows as Teck deal brings it back to earth

Just a 1.5% movement? That’s almost unheard of for Glencore shares which have gone haywire in recent weeks.

Investors have become accustomed to sharp rises and falls from Glencore with day traders — who feast on volatile stocks — singling the company out as a potential gold mine.

After another 5% rise yesterday, it seemed inevitable that traders would cash in on the rise.

However, today’s decline — down 1.9p to 122.1p — was not as heavy as it could have been as the overall share price recovery continues from the lowly 66p it hit only last week.

Glencore had Teck Resources to thank as the Canadian miner inked a so-called “streaming” deal that will see it pocket $610 million (£398 million) for a portion of future silver production at a set price from the Antamina mine in Peru — described in industry reports as “the ninth-biggest silver mine in the world”.

It bodes well for Glencore which, like BHP Billiton — up 13p at 1121p — owns more than a third of the mine, especially since the mine predominantly produces copper.

The deal should yield Glencore $910 million and hopes are that it can strike more of the same as chief executive Ivan Glasenberg looks for ways to trim the business’s huge debt pile.

The FTSE 100 remained relatively flat, 2.04 lower at 6334.31, as investors waited for news of interest rates, in the UK, in Europe and across the Atlantic later in the day.

A second downgrade to Sell in successive days — this time from Peel Hunt — knocked Marks & Spencer 5.3p lower to 493.8p as the broker warned of an “extremely dark” picture for the struggling clothing division.

Bargain-hunters sniffed out shares in Shire, 41p up at 4370p, in the wake of the drugmaker’s recent falls — which are likely to mean it has to raise its offer significantly for Baxalta to stand any chance of buying the US company. 

It’s time to pile into FirstGroup shares, according to UBS, which upgraded the train-to-bus group. Investors listened and the shares accelerated 1.15p to 99.35p.

Punters also snapped up bombed-out blur Group, which jumped 3.14p or 13% to 26.64p.

The crowdsourcing specialist — once a darling of AIM worth more than 800p a share — was forced to revise down revenues for 2013 last week after a probe from the Financial Reporting Council confirmed it had booked in contracts before their completion.

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October 8, 2015 |
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