AustralianSuper, a major pension fund, has expressed support for the possibility of Glencore, a Swiss-based commodities trader and miner, listing its shares on the Australian Securities Exchange (ASX). According to Luke Smith, a portfolio manager at AustralianSuper, such a move would be advantageous for both Glencore and the ASX. Smith made these comments at the Australian Financial Review mining summit held in Perth.
Smith emphasized that the Australian share market is considered the most informed mining market globally, which could allow Glencore’s shares to better reflect the company’s intrinsic value. He noted that AustralianSuper has engaged in discussions with Glencore regarding this potential listing, which would provide more investment options for investors like AustralianSuper.
Glencore has indicated openness to considering a secondary listing in Australia. Earlier this year, Glencore and Rio Tinto explored a merger that could have created a $240 billion entity, but Rio Tinto withdrew, citing insufficient cost advantages. Speculation persists that Glencore remains interested in such a merger.
Industry Growth and Investment Strategies
Glencore CEO Gary Nagle and other industry leaders have argued for the need for mining companies to grow in size to enhance their relevance and influence, thereby attracting a broader range of investors. However, Smith mentioned that AustralianSuper remains cautious about mergers and acquisitions in the mining sector. He stated that even with the emergence of a large company, it would still not rival major tech companies in size.
Smith explained that AustralianSuper evaluates mergers and acquisitions based on their potential to create value over the long term, rather than focusing on short-term share price increases. The fund is known for its balanced approach, sometimes approving and sometimes rejecting such transactions, depending on their alignment with long-term investment goals.
Olivia Markham, a portfolio manager at BlackRock, also commented on the merits of sensible mergers and acquisitions as a strategy for miners to grow and attract generalist investors to fund large and complex projects.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
