Shorting Glencore « Mining Blog

Shorting Glencore

5. October 2011,

I’ve referred to the practice of “shorting” (short-selling) corporate stock in recent weeks – mainly in relation to attempts by anonymous investors to bring down the fortunes of Silvercorp, which they have accused of mis-management and making fraudulent claims.

But the practice is far wider than this, and a piece in yesterday’s City A.M newspaper (a London-published free daily) suggests that it’s now being used – primarily by hedge funds – to profit from the far-from-satisfactory financial performance of Glencore since it listed this summer on the London Stock Exchange.

According to the research director of “Data Explorers”, there’s been an unusual rate of borrowing by funds of Glencore shares since late August. This is a sure indication that the funds believe market confidence in the world’s biggest metals and food commodities’ trader is significantly fading.

Moreover, says City A.M., the funds are also shorting Investec – the London and Johannesburg-listed bank which is heavily invested in gold mining. See:
http://moneytometal.org/index.php/Investec_Bank_PLC

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