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MitonOptimal Weekly CommentThe recent rout in Glencore’s share price was hot news last week and its subsequent bounce is also raising numerous equity analysts’ questions.  What is interesting to us, however, is the magnitude of this versus the last quarter’s hot news: Greece.  Was the fall in Greek banks’ share prices or that of Glencore more of a trauma for European stock investors?

Since Glencore’s stock market capitalization dwarfs that of the entire Greek Banking sector, the answer is clear.  According to Bloomberg, as much as US$14bn was wiped off Glencore’s shareholder value in September versus US$4.4bn off the Greek bank index in August.

Meanwhile, in risk-adjusted terms, Glencore’s unprecedented volatility in the past ten days is double that of the Greek lenders!  The resource giant’s share price moved an average of 7.4% per day in September and was down a record 29% in a single day (last Monday).  By comparison, the FTSE/Athex Banks index, which includes companies such as The National Bank of Greece and Piraeus Bank, recorded an average daily rise or fall of “only” 6.5% during this year’s tumultuous months.

Week 41 2015 charts

As we stated in a Weekly Comment a few weeks ago, the only real cheap asset class is volatility itself.  Happily, our investments in this space have been doing a fine job recently.


Glencore vs. Greece








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MitonOptimal International Limited is registered in Guernsey (Registration No. 51561) and is the overlying holding company of the companies that make up the MitonOptimal Group.
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