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London - Glencore [JSE:GLN] investor Harris Associates LP, one of the biggest shareholders in the commodity trader and miner, is betting this year’s worst performer on the UK’s benchmark stock index will recover and say they have not invested in this as activist shareholders.
Harris increased its stake to 4.5% by buying shares in the past 30 days as Glencore tumbled, said David Herro, chief investment officer for international stocks.
Glencore has its primary listing on the London Stock Exchange and a secondary listing on the JSE.
Harris is now Glencore’s fourth-largest shareholder with the stake worth about R20.68bn based on Monday’s closing price. It owned about 1% of the company as of June 30, according to public filings, and hasn’t previously disclosed its increased holding.
“We like their copper position, we like their trading position,” Herro, who manages the R374.8bn Oakmark International Fund, said in a phone interview. “Their other metals don’t seem to be anywhere near as impaired as iron ore. They are well-positioned.”
Glencore lost 43% in London this year as commodities slumped to a 13-year low. The Telegraph over the weekend described Herro as an activist investor building a stake to pressure billionaire chief executive officer Ivan Glasenberg.
‘Value shop’
“We have not invested in this as activist shareholders, we’ve made this investment as long-term value investors,” Herro said. “The business at this price is substantially undervalued. We are a long-only value shop.”
Commodity prices have retreated as China’s economy expands at the slowest pace in a quarter of a century. The Asian country is the biggest consumer of raw materials. Iron ore delivered to China has dropped 20% this year.
A spokesperson for Baar, Switzerland-based Glencore declined to comment.
Glencore fell 1.7% to 170 pence in London on Monday, giving the company a market value of about R452bn. The shares have fallen to the lowest since they began trading in 2011, when the company sold stock at 530 pence each. It is this year’s worst performer on the FTSE 100 index.
The producer’s shares in Hong Kong advanced as much as 4.3% to HK$21.90 on Tuesday, before trading unchanged at HK$21 at 10:03 local time. Its share on the JSE was down 2% to R34.28.
Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.
