Shares in Glencore (LON:GLEN) have fallen sharply this Friday as the company disclosed yesterday that it was being investigated by the US Commodity Futures Trading Commission (CFTC). The news marks another blow for the FTSE 100 commodities giant which received a subpoena from the US Department of Justice (DoJ) last year relating to possible corruption and money-laundering.
As of 13:15 BST, the Glencore share price had lost 3.57 percent to 309.96p, underperforming the broader London market, with the benchmark FTSE 100 index currently standing 0.11 percent lower at 7,425.70 points. The group’s shares have given up more than 15 percent of their value over the past year, as compared with a largely flat Footsie.
Another US probe
Glencore disclosed in a short statement to the London Stock Exchange yesterday, following the close of the UK market, that the CFTC was investigating whether the company and its subsidiaries might have violated certain provisions of the Commodity Exchange Act and/or CFTC Regulations through corrupt practices in connection with commodities. The company said that it understood that the probe was at an early stage and had a similar scope as the current ongoing investigation by the DoJ.
The commodities giant noted that it would cooperate with the investigation and that its response would be managed by its investigations committee set up in July last year to oversee the group’s response to the DoJ probe.
Analysts on Glencore
Deutsche Bank reaffirmed the commodities giant as a ‘buy’ today, with a target of 370p on the Glencore share price. Royal Bank of Canada and JPMorgan Chase & Co, both of which are ‘neutral’ on the London-listed group, set valuations on the stock of 330p and 380p, respectively. According to MarketBeat, Glencore currently boasts a consensus ‘buy’ rating and an average price target of 355.25p.
The commodities giant is scheduled to publish its first-quarter production report on Tuesday, to be followed by the company’s annual general meeting on May 9.