Glencore resumes slide despite investor meeting, John Mack share purchase
By Dmitry Zhdannikov, Sarah McFarlane and Olivia Kumwenda-Mtambo
LONDON (Reuters) - Glencore's share price eased again on Thursday despite the company's assurances to investors that its debt-cutting plans remain on track and a decision by board member and legendary banker John Mack to buy $600,000 worth of stock.
Battered by a collapse in global commodity prices over the past year, the share price has lost some 70 percent this year, nearly half of that on Monday alone. On Thursday it resumed its descent after an initial rally and was down 0.7 percent at 1415 GMT, off its day lows.
Traders blamed the return of hedge funds and short-sellers for the renewed losses.
Earlier the commodities trading and mining giant said Mack, a former chief executive of Wall Street bank Morgan Stanley, had bought stock, following a similar move this week by former BP head and Glencore board member Tony Hayward.
The share price had initially gained as much as 6 percent on Thursday after credit analysts from Barclays said a meeting they had organized with members of Glencore's management on Wednesday, including the co-head of corporate finance Carlos Perezagua and the head of strategy Paul Smith, managed to address many concerns of investors and bondholders.
"It was an encouraging meeting (on Wednesday) as we believe it helped to clear up many misconceptions and confusion we believe is currently in the market around commodity trading," credit analysts from Barclays said in a note on Thursday.
A source close to Glencore confirmed that the meeting had mainly focused on the balance sheet and debt reduction plan.
The market jitters over Glencore reflect concerns over the Swiss-based trader and miner's ability to service its heavy debts, accumulated after an asset buying spree, amid the slump in commodity prices. Continued...