13th August 2014
Glencore remains attractive for investors willing to accept a medium level of risk says The Share Centre. The broker says Glencore’s mixed production report is similar to the first quarter of this year. However commodities have increased in price with demand rising as the global economy balances
Helal Miah, investment research analyst at The Share Centre says: “Glencore continues to have a fairly mixed production report, similar to the first quarter of this year. Compared to the same period last year, coal production was up 5%, copper production was up 13% and oil production was up 41%. However, due to depleting reserves, zinc production was down 11% and due to maintenance shutdowns, nickel production was down 8%.
“In terms of achievements, Glencore completed the disposal of Las Bambas operations for $6.5 billion and completed the acquisition of oil and gas exploration company Caracal Energy which is based in Chad for $1.6 billion.
“The cyclical mining sector can often be volatile at the best of times and these numbers are likely to be somewhat uninspiring for investors. However, as a sector it has begun to show some stability, with some commodities having increased in price as the demand supply imbalances normalise and as the global economy continues towards a path to recovery. As a result, we continue to recommend Glencore as a ‘buy’ for investors who are willing to accept a medium level of risk.”