Lai See

PUBLISHED : Saturday, 16 April, 2011, 12:00am
UPDATED : Saturday, 16 April, 2011, 12:00am


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Could old friends bring Glencore to Hong Kong?

All this week Simon Murray, former boss of Hutchison Whampoa and adventurer extraordinaire, has been tipped as the leading contender for the chairmanship of commodities trading giant Glencore. But the eventual announcement went surprisingly unsmoothly with the BBC's business editor Robert Peston announcing that British peer John Browne was the anointed one. Everyone assumed he knew what he was talking about as Glencore's public relations was being handled by Finsbury, which is run by Roland Rudd, a close friend of Peston's. However some hours later the company made the Murray announcement apparently after changing its mind. Hardly the best way for Glencore to demonstrate its suitability to be a public company. It left people wondering why the matter had to be left to the last minute, since the company's IPO has been a long time coming.

Now that he's been confirmed in the post we have the intriguing situation of Murray as chairman of Glencore with his buddy, former HSBC chairman John Bond, chairman of London-listed miner Xstrata of which Glencore owns 34 per cent. Xstrata's chief executive recently told analysts it was 'unsustainable' in the long term for both companies to be independently listed.

The options are that Glencore sells its stake or the two companies merge. Observers say that a merger might prove difficult in London with questions arising over monopolies. But it might be achieved more easily in Hong Kong, so the thinking goes, as the regulatory regime isn't so fussy about niceties. So one, admittedly fanciful, scenario is for Xstrata to follow Glencore with a second listing in Hong Kong and then for both of them to de-list from London and merge in Hong Kong. Stranger things have happened.

Forbes as feisty as ever

Steve Forbes (pictured) was in a feisty mood yesterday in Hong Kong when talking to the American Chamber of Commerce. Forbes, media chairman and editor-in-chief of Forbes magazine, tore into the US Federal Reserve for allowing the US dollar to weaken. Forbes said the weak dollar would mean slow recovery and turmoil, but 'the Federal Reserve is absolutely ignorant of that'.

He said linking the dollar to gold would help stabilise the currency.

'I'll make a prediction that in the next five years, you're going to see something that would astound most economists today: The dollar's going to have a new link to gold,' Even when somebody asked him about China's aggressive approach to internationalising the yuan, Forbes couldn't stop bashing the Fed. He suggested the Chinese government buy books on central banking online and send them to the American Federal Reserve as a 'cultural exchange'. Such a shame his run for the US presidency failed.

Don't bank on this pair

Strewth! Count your blessings that you're not in Australia. After our item on Standard Chartered yesterday, we thought it was only fair to point out that some Australian bank customers are having an even tougher time of it. The Sydney Morning Herald yesterday quoted a solicitor as saying she had been inundated with calls from Commonwealth Bank of Australia customers seeking legal help after receiving threatening letters from the bank for overdrawing their accounts during a recent ATM glitch. It quoted police in NSW and Victoria as saying that more than 100 CBA customers were facing criminal charges over the matter.

And The Australian newspaper reported that possibly millions of people had been left stranded without pay following another computing failure at National Australia Bank. The NAB meltdown affected the pay of workers whose employers use NAB and associated banks for their payroll and follows a previous payment processing failure last year. It quoted an unnamed banking source as saying the glitch had also affected payrolls processed by NAB on behalf of other banks, including HSBC, Citibank and UBS.

Going cold on commodities

Observers have been quick to notice the apparent coincidence that had Goldman Sachs announcing the end of the commodities boom in the same week Glencore announced one of the biggest IPO's in years. One that will yield fat fees for the investment banks involved, Citigroup, Credit Suisse, and Morgan Stanley but not, alas, Goldman.

It is hard to imagine them making that announcement if they had been involved in the IPO. The firm's announced on Monday that the risks of investing in commodities outweighed potential gains, dropping its recommendation to buy a basket of raw materials including crude oil, copper, cotton and platinum, Bloomberg reported.

Surely not a case of sour grapes or bruised ego?