[miningmx.com] – THE secretive nature of Glencore’s trading activities added complexity to its valuation, said Bloomberg News citing analysts who have widely differing views on whether the Swiss firm will recover ground after shedding roughly 30% of its stock value on September 28.
“Glencore does have a unique trading business that is different from their competitors, and it’s a much more difficult business to model than a straight “you mine it, you sell it, and take whatever margin’ one,’ said Clarksons Platou Securities’ Jeremy Sussman.
At Sanford C. Bernstein, price targets published by Paul Gait suggest Glencore can rally sevenfold to 450 pence whereas Nomura Holdings’ 120p forecast implies a market value that is $72bn lower, said Bloomberg News.
“It’s fair to say the marketing segment is a black box,’ said David Wang, an analyst with Morningstar Investment Services.
“They disclose the volumes they transact but not what sort of bets they’ve been making. There could be so many bets that it’s difficult to distill down to a couple of data points. That being said, there hasn’t been much transparency regarding it.’
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