Deutsche Bank says Glencore may weigh listing move to US

Liam Fitzpatrick and colleagues said the Baar, Switzerland-headquartered mining and trading firm’s primary listing could come into focus due to a lack of shareholder support for a plan to split off its coal business and list it separately in New York. Glencore began trading on the London Stock Exchange in 2011, in what was the bourse’s largest ever IPO at the time.

Mutual-fund data shows the US market is more supportive of companies involved in fossil fuels, with many in Europe excluding the sector from their portfolios, the analysts wrote. Meanwhile, US-listed copper stocks trade at very large premiums to the UK miners, they said.

“UK valuations and coal exclusion could lead to a US listing being considered” by Glencore, they wrote. “We hope the UK remains a key hub for mining investments, but if the valuation gap persists, a shift in listing could make sense.”

About 48% of mutual funds in Europe exclude coal, compared with less than 1% in the US, according to Deutsche Bank.

Spokespeople for Glencore and London Stock Exchange Group Plc declined to comment.

Glencore last year bought a majority stake in Teck Resources Ltd.’s coal business, and plans to put the combined coal operations into a new company listed on the New York Stock Exchange within two years, subject to shareholder approval.

Companies raised just $1 billion on the London Stock Exchange in 2023, the least since 2009, as trading volumes slumped. An especially bitter blow was London’s failure to secure the listing of one of the UK’s most important technology companies — Cambridge, England-based chip designer Arm Holdings Plc.

The MSCI UK share index was trading at a 46% discount to its US counterpart as of late February, based on forward price-to-earnings ratios, increasing the allure of New York over London.

Several European companies have recently shifted to US primary listings, including CRH Plc, Linde Plc and Ferguson Plc, the Deutsche Bank analysts said, while noting that those firms are much more exposed to the US than Glencore. In 2022, rival miner BHP Group Ltd. switched its main listing to Sydney, ending a dual arrangement with London. Most of the trading in BHP shares was already done in Australia.