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’Snap news
Breaking pre-market news on Thursday,
- Morgan Stanley gives pre-stabilisation notice on Glencore IPO – statement.
- Bank of Ireland says Irish economy has begun to stabilise – statement.
- Deutsche Bank said to have “privately accepted”
Snap news
Breaking pre-market news on Monday,
- Glencore said to lift IPO price range to 520-550p a share – Reuters.
- Euro slumps to seven-week low after IMF head’s arrest – Reuters.
- London Stock Exchange says TMX has received approach from Maple Group – statement.
What’s going on in IPO land?
First it’s RenRen, then Dunkin’ Donuts and of course, the mother of them all, Glencore, to name a tiny handful of the highest-profile IPOs – planned or executed – making headlines on Thursday.
In the US alone,
Glencore’s Achilles’ heel
FT Alphaville has been poring over the Glencore prospectus overnight and we’ve come across a few further points of interest on the matter of funding.
As we noted earlier last month, Glencore’s marketing business is very much focused on tried and tested arbitrage strategies unconnected to the ‘flat-price’ of commodities,
More from the Glencore prospectus
Remember this?
It’s the Glencore CDS spread, courtesy of Markit, in December 2008.
We never fully got the bottom of why it surged to 3125 bps other than the fact the trading house was heavily reliant on short term debt markets to fund its marketing activities.
Meet the $9.6bn man (and Glencore’s other billionaires)
It’s out, and longer than Tolstoy’s War & Peace.
Presenting the Glencore prospectus, which is so big we can’t upload it to our servers — but you can find the 134MB file on Scribd once it loads!
A quick glance at the document reveals that the 15.8 per cent stake of chief executive Ivan Glasenberg will be worth around $9.6bn at the mid points of the 480p to 580p range.
Glencore IPO term sheet
Related link:
Price Range and Publication of Prospectus – Glencore
Snap news
Breaking pre-market news on Wednesday,
- Glencore sets price range for flotation; price range of between $48bn and $58bn — statement.
- Next says recent warm weather and Royal Wedding bank holiday boosted sales;
The Glencore market-timing myth
There was a really interesting column penned by Matthew Lynn on Tuesday.
In a nutshell it argued that investors should be mindful of investing in a company known for its shrewdness when it comes to market-timing.
Further further reading
For the commute home, where you always over-deliver on expectations,
- Google misses earnings expectations.
- China changes how it reports GDP.
- Meet the Glencore IPO’s bankers. And its winners and losers.
Glencore’s trading strategies disclosed!
Courtesy of Glencore’s intention to float filing on Thursday an insight (finally!) into the previously shy commodity powerhouse’s closely held trading strategies.
From the document:
Types of arbitrage strategies Many of the physical commodity markets in which Glencore operates are fragmented or periodically volatile.
Glencore prepares for take-off
After weeks of speculation (and spin) Glencore has finally published its Intention to Float document.
A lot of it is has already found its way into the public domain, but there are some additional nuggets like details of Glencore’s trading strategies (to follow in a separate post).
Snap news
Breaking pre-market news on Thursday,
- Glencore to raise $9bn-$11bn in London IPO — statement.
- BP and Rosneft extend share swap deadline to May 16 — statement.
- Commerzbank prices cash call at €4.25 a share — statement.
The unintended consequences of the nuclear scare
This is just the start of it, and one tiny aspect of the rapidly widening impact of Japan’s worsening nuclear crisis.
Not only did the failed attempts by Tepco, operator of Japan’s cripplied Fukushima nuclear power plants,
Snap news
Breaking pre-market news on Thursday,
- Secretary of State for Culture, Olympics, Media and Sport says he intends to approve News Corp bid for BSkyB — statement.
- Glencore announces 39% rise in full-year net income before exceptionals – statement.
Glencore’s floating ambitions
The Telegraph has become the latest observer to kick along speculation that Glencore is gearing up for a mega-float in the City, reporting on Tuesday that the secretive Swiss-based commodities trader is understood to be preparing for a £31bn City listing as early as next April.
Just like a giant secured loan to commodity producers…
Last week was London Metal Exchange week.
And it turns out, the topic of debate, according to Société Générale’s cross-asset research analysts at least, was nothing other than the upcoming splurge of physically-backed commodity ETFs that’s about to hit the market.
Snap news
Breaking pre-market news on Thursday:
- Petropavlovsk says production schedule for the rest of the year is very challenging – statement.
- Nestle completes sales of remaining shares in Alcon to Novartis for $28.3bn – statement.
And the winner so far in the wheat crisis is …
It could have been very bad for the world’s largest commodities trader. But if you thought for a moment that the escalating wheat crisis might hit the middle-men in the hot seats of the global grain trade,
CDS report: Grinding tighter
Markit’s Gavan Nolan wrote this CDS report
News vacuum helping spreads to tighten
Euro rallying, supporting risky assets
Peripheral sovereigns lagging broader market – Greece 680bp, Italy 215bp (+1),
CDS report: Shorts back off
Risk appetite returning, little in the way of news
Commodity credits rebounding
Sovereigns tightening, Italy underperforming – Greece 675bp, Portugal 320bp (-10), Spain 235bp (-7), Ireland 245bp (-9),
CDS report: Geopolitical risk to the fore
After a tepid start to the week yesterday, the credit markets today showed the volatility we have become accustomed to. Long-standing concerns over eurozone sovereigns and their fragile banking systems combined with fresh geopolitical turmoil to push spreads wider.
CDS report: In retreat
European credit markets in retreat after solid opening
Positive sentiment from EUR750 billion bailout a distant memory
Sovereigns under pressure – Greece 700bp (+23), Portugal 335bp (+57), Spain 205bp (+22),
Xstrata Glencore, maybe, someday, possibly
This graph is less than 18 months old.
That’s Glencore’s CDS spread, courtesy of Markit, topping out at around 3125 bps back in early December 2008.
None specialists should be aware that a CDS spread more than 3000 bps wide is tantamount to an entity “going bust already.”
Snap news
Breaking pre-market news on Wednesday,
Glencore says net profits fell 43 per cent in 2009 – statement.
- Gulf Keystone says partner in Kurdistan in default, to pay $40m to regional government – statement.
Snap news
Breaking pre-market news on Friday,
- Xstrata says Glencore exercised option to buy Prodeco assets for $2.25bn – statement.
- WPP FY like-for-like revenue down 8.1 per cent – statement.
- Kenmare Resource announces £179m cash call – statement.
Glencore discovers ETFs
Exchange-traded commodity funds backed by physical assets as opposed to financial derivatives are, as we have noted before, increasingly the rage among both retail and institutional investors.
Gold,
Introducing Glencore results
Here’s a bit of a first, Glencore’s first-half results presented nice and transparently on their website on Thursday morning.
As it’s such a novelty for the private Switzerland-based company, we thought we’d reproduce the statement here (our emphasis):