Monday 24 September 2018

Glencore shares tank after mining giant hit with US subpoena in money-laundering probe

Mining giant Glencore has been subpoenaed (Dave Thompson/PA)
Mining giant Glencore has been subpoenaed (Dave Thompson/PA)

Kalyeena Makortoff

Glencore shares tumbled after the mining giant announced that it had been slapped with a US subpoena amid an investigation into potential money-laundering breaches.

The company said the US Department of Justice is seeking documents and other records "with respect to compliance with the Foreign Corrupt Practices Act and United States money- laundering statutes".

The documents relate to Glencore's business in Nigeria, Democratic Republic of the Congo and Venezuela over the past 11 years.

Glencore said it was reviewing the subpoena and would provide further information as appropriate.

The company's shares tanked on the news, falling nearly 11pc and dropping to the bottom of the FTSE 100 in morning trading.

It marked the lowest level for Glencore in nearly a year.

Glencore shares fell nearly 11% in morning trading (PA)
Glencore shares fell nearly 11% in morning trading (PA)

Jordan Hiscott, a chief trader at ayondo markets, said: "Shock news like this is clearly negative for the company, but the move lower is no doubt exacerbated by the timing of the news release, which was just after UK equities opened.

"In addition, from a technical trading perspective, the share price is currently below its 100 and 200 daily moving average. A close below here, in my view, would be additionally negative for the trajectory of the shares going forward."

Back in May, Glencore gave a positive view of its full-year results, saying it expected underlying earnings to be at top half of its expected range for between $2.2bn and $3.2bn.

It came after the firm reported that first-quarter production was in line with forecasts, while output was broadly in line across its commodity groups.

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