Last month’s attention-grabbing IPO for Glencore (LON: GLEN) valued the commodities giant at $59 billion. Oh, how the mighty have fallen.
The Swiss holding company that mushroomed in size in the years leading up to its vaunted public offering, released its first earnings report last Tuesday, falling short of analyst expectations. It is now worth $32 billion. The company tried to sound upbeat about its prospects, but cited concerns about slackening demand in countries like China. The Asian giant has been a voracious Pac-Man as far as commodities demand is concerned, so the worry is well placed.
The Glencore news coincided with release of the BofA Merrill Lynch Global Fund Managers Survey, which showed that professional investors view gold as more overvalued than at any time since December 2009; 37% of managers see the yellow metal as overvalued.
Meanwhile the market rout in commodities gathered pace in the past few days as fears of a Greek default pushed up the dollar. Since commodities are priced in dollars, they automatically become costlier to emerging markets buyers using other currencies.