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Glencore’s (LON: GLEN), (ASX: GLC) shares traded heavily in their debut on Wednesday on the Australian Securities Exchange, where the miner and trader hopes to secure a better valuation from investors seeking greater copper exposure.
Glencore CEO Gary Nagle expects strong demand from Australian investors betting on copper’s role in electrification, he said on Friday, as demand rises for the metal’s use in power grid expansions, transport and AI data centres.
“Glencore has been investing in Australia for decades and we know the Australian investment community has a sophisticated understanding of global resources and commodity markets,” Nagle said in a statement on Wednesday.
Glencore CHESS Depositary Interests (CDIs) closed at A$11.23 ($7.86), down 1.8% from their opening at A$11.44, with more than 4 million shares changing hands. Shares in its large mining rivals on the Australian market, BHP Group (ASX: BHP) and Rio Tinto (ASX: RIO), also fell.
Glencore shares already trade in London with another secondary listing in Johannesburg. On a pence equivalent, the CDIs opened at 603 pence and finished at 592.64 pence, a small premium to Glencore’s last close on the London Stock Exchange at 582.90.
Nagle has previously said he believes the $88 billion company can achieve inclusion in Australia’s benchmark S&P/ASX 200 index within 12 months, but analysts see momentum behind the stock potentially propelling it into the top indexes in half that time.
“It is not every day that a company of Glencore’s scale joins the ASX, particularly in a period of subdued listing activity,” said Paul Schroder, a partner at law firm Mallesons.
“Its arrival is a significant addition to the Australian market and reinforces the ASX’s standing as a leading resources exchange.”
Buyout opportunities
Analysts and investors speculated Glencore’s decision to list Down Under could help acclimatise those who had not seen value in its approach to Rio Tinto last year.
Rio Tinto walked away from takeover talks with Glencore in February, ending months of negotiations over a $240 billion tie-up that would have reshaped the global mining industry.
Nagle told reporters last week that a deeper local presence in Australia, where it produces coal, copper, zinc, lead and nickel, may yield business opportunities, although it had no set buyout list.
JPMorgan analysts said on Friday after a meeting with Nagle that Glencore’s management team still saw merits in a combination with Rio Tinto and noted its shares had outperformed its Anglo-Australian rival by 10% since negotiations collapsed in February.
“M&A is seen as part of the growth strategy and it was noted ‘who knows what happens in the future,'” the analysts said in a report.
($1 = 0.7546 pounds, 1.4286 Australian dollars)
(1 British pound = 1.8949 Australian dollars)
(Reporting by Melanie Burton; Additional reporting by Polina Devitt in London; Editing by Jamie Freed and Sonali Paul)
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