BofAML upgrades Glencore on debt-reduction plans

7th Sep 2015 07:57

(ShareCast News) - Bank of America Merrill Lynch upgraded Glencore to 'neutral' from 'underperform' and lifted the price target to 160p from 150p following the company's announcement on Monday of its debt reduction plan."Unlike other management teams in the sector, Glencore's has acknowledged its debt problem and is taking steps to address it," said the bank.It said the plan goes some way to addressing some of its concerns on Glencore's financing, but it still has a question mark over Chinese demand, hence why it hasn't turned more positive on the stock.It added that even after the reduction, Glencore will still be quite highly geared.It pointed to the company's decision to cut production at certain African copper assets, which will remove up to 400,000 tonnes from the market over the next 18 months. Merrill said this should tighten the copper market and help put a floor under prices."Glencore's CEO, Ivan Glasenberg, is putting his money where his mouth is, having often chastised fellow CEOs for oversupplying commodity markets. Wow!"