4 ways ASX mining investors are affected by Glencore
After finally coming to grips that it needed to begin making cost-cutting moves in order to reduce its US$30 billion of debt, Swiss mining giant Glencore has decided not to pay dividend for a year, sell assets and undertake a capital raising.
In addition, Glencore will remove 400,000 tonnes of copper cathode from the market by halting production at its African mines in the Democratic Republic of Congo as well as in Zambia. Since the news was released, Glencore’s stock shot up 11.7 per cent.
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Due to the latest developments, here are four things investors should be taking notice of:
1. The reaction to Glencore’s share price provides a lesson for local resource companies such as Santos that are currently under pressure because they may have to undertake a capital raising. While it’s still too early to know how much Santos could get back from asset divestments, it’s doubtful it will have much impact due to the company’s $9 billion of debt on its balance sheet.
If Glencore uses the recent bounce in share price to sell new shares, it may help the company rebound from the oil slump.
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2. Glencore’s latest plans won’t stop analysts from speculating about its potential bid to take over base-metals miner South32. Some believe this transaction would help Glencore’s efforts, as it could make an offer for a company that has about $900 million in funds and a conservative debt to asset ratio.
3. Glencore’s dividend suspension has let some to wonder if rivals BHP Billiton and Rio Tinto should rethink their progressive dividend policy. While it’s doubtful that they should right now, both BHP and Rio are in better shape on the balance sheets and should continue meeting their dividend targets in the near future.
4. Those with shares in copper producers OZ Minerals Limited and Sandfire Resources NL should be excited with Glencore after the coal price rose over six per cent since news of the production cut. Copper producers may want to ponder taking Glencore’s lead of cutting back the commodity’s supply.
Source: The Motley Fool
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.