Glencore shares soar following talks of unit sale
Shares in mining giant Glencore soared in afternoon trade Monday in Hong Kong following reports of talks on selling its agriculture business, but the firm said it was unaware why its stock had risen so sharply.
Shares were up 19.63 percent in late afternoon trading after shooting 72 percent higher at one point.
Singapore’s sovereign wealth fund, Japanese trading house Mitsui & Co., and a Canadian pension fund are among potential buyers of the unit, Bloomberg News reported last week.
The agricultural unit could be worth US$10 billion, according to research cited by Bloomberg News.
However, Glencore said in a statement to the Hong Kong Stock Exchange it did not know of specific reasons for the jump.
“The Board confirms that it is not aware of any reasons for these price and volume movements or of any information which must be announced to avoid a false market in the Company’s securities,” the statement said.
Shares in the Swiss-based firm fluctuated wildly last week amid investor fears that sinking commodity prices would affect its ability to meet outstanding debt obligations.
The firm plunged in trading last week after brokerage Investec questioned its future if commodity prices — which are wallowing at multi-year lows owing to weak demand from a slowing China — fail to recover soon.
Most resources-linked firms have taken a hit in recent months as the price of copper, aluminium, iron ore and oil have tumbled.