CAPITAL MARKETS

Glencore to ditch Hong Kong listing

Diversified miner's plan to attract Asia-based investors falls short

Staff reporter

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The miner and trader said only a small number of its investor base had elected to hold HK shares, with just 0.3% of its share capital coming from Hong Kong.

"After careful consideration, the board has concluded that it is in the best interests of the company, the shareholders and holders of other securities of the company as a whole if the listing of the shares on the HKEX is withdrawn," Glencore said.

When the company carried out its initial public offering in 2011, CEO Ivan Glasenberg said a listing in Asia would help build its profile in the region where its big customers are based.

This pitch helped attract large cornerstone investors during its US$60 billion IPO, but the HK base has since dwindled.

Glencore is not looking to remove it South African listing, which it added in 2013, though.

Despite negative investor sentiment towards South Africa - thanks to some extreme new mining legislation plans - the trading company is, evidently, still attracting investment from those in the region.

In the announcement to the Hong Kong Stock Exchange, it said its shares will continue to be listed on both the LSE and JSE, but it planned to ditch its HK-listed shares by January 31.

On Monday, the company announced production guidance downgrades following a September quarter hit by rains, strikes and power outages.

Higher commodity prices saw the company upgrade its marketing divisions earnings estimate. It now expects to post EBIT of $2.6-2.8 billion for the year.

This is the company's third upwards revision for the year, and an increase on its previous estimate of $2.4-2.7 billion.

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