Deutsche Bank Analyst Foresees Potential Glencore Shift to US Markets

Deutsche Bank Analyst Foresees Potential Glencore Shift to US Markets

Wed, Apr 3rd 2024

Deutsche Bank analysts speculate Glencore may transition its primary listing to the US.


Deutsche Bank AG analyst has highlighted the possibility of Glencore Plc, a mining giant headquartered in Baar, Switzerland, relocating its primary listing from London to New York.

This speculation stems from perceived challenges in gaining shareholder backing for Glencore’s proposal to segregate its coal segment and pursue a separate listing in New York according to claims made by Bloomberg.

Since its landmark IPO in 2011 on the Stock Exchange in London, Glencore has established a significant presence in the global mining and trading arena.

However, analysts led by Liam Fitzpatrick at Deutsche Bank point to a noticeable valuation discrepancy, particularly in sectors such as copper, where US-listed entities enjoy substantial premiums over their UK counterparts.

This discrepancy, coupled with a more accommodating stance towards fossil fuel industries in the US market, might prompt Glencore to consider a listing shift.

Data presented by Deutsche Bank reveals a stark contrast in coal exclusion policies between European and US mutual funds, further underscoring the strategic rationale behind such a move.

Amidst dwindling IPO activities and diminishing trading volumes on the Stock Exchange in London, in recent years, the allure of the US market has grown.

UK share index’s have significant discounts compared to US indices, underscoring the potential benefits of a US primary listing. The transition of several European companies to the US, including CRH Plc and Linde Plc, exemplifies this trend, although Deutsche Bank notes that these firms have a more pronounced US market exposure compared to Glencore.

This contemplation by Glencore follows its acquisition of a major coal business, with plans to integrate this operation into a new entity for NYSE listing, contingent on shareholder consent.

The broader context includes a challenging phase for the London Stock Exchange, which saw minimal capital raised in 2023 and missed out on significant listings such as Arm Holdings Plc.

As the industry watches closely, Glencore’s potential pivot to the US market could mark a significant milestone in the evolving dynamics of global stock exchanges, reflecting broader trends in market valuations and investment preferences.

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