Commodities giant Glencore has attempted to shrug off fears of a slowdown in China and a commodities crash.
As the London- and Hong Kong-listed mining company unveiled its first quarterly results as a public company, Glencore chief executive Ivan Glasenberg insisted that soaring mainland inflation would cause just a temporary pause in the bank lending and infrastructure investment that has powered China's massive resources consumption.
'The next three to six months could be difficult [in China],' Glasenberg said. 'As they get some inflation they do pull back on things like bank lending, but these are short-term efforts we see from time to time.'
Consumer prices on the mainland rose 5.5 per cent year on year in May. Yesterday, the People's Bank of China increased the reserve ratio - the percentage of deposits banks must store in the central bank - by 50 basis points to 21.5 per cent for major lenders.
Glencore, which raised US$10 billion in its initial public offering on May 25, said first-quarter net income rose to US$1.09 billion from US$886 million in the same period last year.
Glasenberg dismissed media reports that his company was preparing to buy Kazakh mining company ENRC. However, his firm has agreed to buy Hong Kong-listed CST Mining's Mina Justa copper deposit in Peru for US$475 million.
Glencore's shares stayed flat at 514p in London as investors balanced Glasenberg's rosy outlook with bleak commodities data. The shares were suspended in Hong Kong ahead of the results and resume trading today.
