Glencore shareholder letter deals another blow to London’s equity markets

Hedge Fund Tribeca has written to Glencore urging it to shift its listing to Sydney to achieve a higher share price.

The letter said: ‘London is no longer the home of mining’.

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The letter penned by Glencore’s major shareholder Tribeca represents another blow for the London’s markets struggling to attract and keep companies listed on its exchanges.

Many will hope London could maintain its prowess in the mining industry, given that large technology companies tend to shun London in favour of New York. 

“Mining giant Glencore is facing pressure from an activist investor to change its primary listing from London to Sydney. Commentary included accusations that London is no longer the home of mining, which doesn’t quite reflect the significant other names in the sector still housed by the city,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

London’s FTSE 100 is home to major global mining giants, including Glencore and Rio Tinto. Anglo American and Antofagasta.

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BHP shifted its main listing to Sydney in 2021. If Glencore were to follow, it would be a disaster for the London Stock Exchange.

The sector has faced the pressure of a slowing Chinese economy, leaving miners trading near multi-year lows which will be a factor behind the grievances detailed in Tribeca’s letter.

“Glencore’s performance has been dented by lower commodity prices, particularly in its coal portfolio in recent months. Disappointing share price performances are often a trigger for activist attention, and there are also some Glencore specific reasons for the weakness in valuation. A change of listing won’t magically fix these, but arguably could help the group refocus,” Lund-Yates said.

“The bigger question marks centre around calls for Glencore’s coal business to remain in the portfolio. It’s been broadly expected that Glencore would look to de-merge these assets at some point, so pressure not to do this means a strategic rethink could be on the cards, if the activists can drum up enough shareholder support.”

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