The chairman of Glencore has spent £90,000 buying 100,000 shares in the troubled commodities trading giant in an attempt to bolster investor confidence.
Tony Hayward bought the shares at 91p on Wednesday amid growing concerns about the long-term prospects of the company.
The former boss of BP, who became chair of Glencore in May 2014, bought the shares as they rose from Monday’s record lows. At one point, they dropped 29% to 66p. Such a large fall is unusual for a company the size of Glencore, which has a place in the FTSE 100. The shares eventually closed at 68.62p, a drop of 29%. They were floated in 2011 at 530p a share.
Hayward receives more than $1m (£700,000) a year for chairing Glencore.
The shares have rallied since Monday, and on Wednesday were the biggest risers in the FTSE 100, ending the day at 92.7p. At this level they are just below the 97p price at which they closed on Friday, before Monday’s rout, but remain well below the 125p at which Glencore raised £1.6bn to bolster its financial position.
The 2011 float price put a £6bn value on the stake of its boss Ivan Glasenberg. His stake is now worth less than £1bn as a result of the slide in the share price.
Analysts at Capital Economics said the problems at Glencore could mark a trough in the price of many commodities. Fears about China should fade, the economists said.
Pessimistic headlines were often a good time to take a contrarian view, they said, adding: “And perhaps more substantially, the problems at Glencore provide one of the clearest illustrations yet of the challenges faced by commodity producers at current low prices.
“The resulting supply response – slower growth in output, if not outright cuts – should feed back into a recovery in prices.”
