(MENAFN- ProactiveInvestors)INTRODUCTION In the news: Glencore (LON:GLEN) There were some interesting comments in the press today about Glencore. This comes after the news that the company will halt its dividend raise US$2.5bn in equity and mothball a number of producing assets notably two copper mines in Zambia and the DRC. Apparently Ivan Glasenberg was insistent that Chinese demand was holding up better than most believe and that while a US$30bn debt pile was high cutting it by 10% should be fine. It was only after Mr Glasenberg sat down in front of investors that the penny dropped. He was firmly told that Glencore needed to prepare for a 'doomsday scenario' on commodity prices triggered by a slowdown in China. The company was then subject to a withering research note from Bank of America Merrill Lynch that said it would have to raise equity to cut debt. The day after that report was issued Standard and Poor's moved Glencore to a 'negative' outlook and the shares lost 16% in two days. Unsurprisingly Ivan was reported as being 'uncharacteristically downbeat' on the call to analysts yesterday. Who can blame him From being considered the 'smartest guy in the room' he is now being viewed in a much less positive light. People really are so cruel. It should be remembered that the Glencore Board has made a damn sight more money out of commodities than the vast majority of commentators in the market. If investors are telling him that China is slowing down then why have they only just woken up to this Anyone who has had exposure to commodities over the past 3-4 years should be well aware that China has been slowing down. It's no surprise to us. Clearly if the wider market has been taken by surprise by this news then maybe these investors should be increasing their exposure to commodities to get a more rounded view of the world. While big mining companies can sometimes be slow to react the sector is probably better prepared than others for any 2016 'collapse'. Investors would be better listening to experienced traders like Glencore rather than taking their views from newspapers. As for BoAML telling the company to raise equity hmm. I wonder what fees it was hoping to get for that gig Oh and don't get me started on Standard and Poor's! Remind me what were its positions before the GFC or the Greek Crisis Glencore management have had the guts to put their money where their mouths are. This is to tune of US$550m! They may have called the market right when they listed this monster but they haven't sold down; this is not a short covering trade. This team has made billions of dollars in dividends for shareholders over the past four years and this will be missed by pension funds around the world. These guys should be given a bit more respect rather than suffering the envy of those who begrudge them the money they have made.
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