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Mémoire
Bachelor thesis

Can reputation risk related to Glencore's activities in the DRC be an impediment to making an investment or indeed to sell one's shareholding stake in Glencore ? : Can this reputation risk undermine Glencore's share price and if so to what extent ?

    2020

59 p.

Mémoire de bachelor: Haute école de gestion de Genève, 2020

English The research objective of this report is to show the impact of reputation risk linked to Glencore’s activities in the DRC. In order to measure the impact of reputational risk, a focus is made on Glencore’s share price. In the first part of this report, the introduction helps the reader to get important contextual information about Glencore’s background and activities in the DRC. An emphasis on reputational risk and its definition is made. The second part is a qualitative analysis which aims to identify what are the main reputational risks for Glencore. An interview with Mr. Matile, lawyer, confirms that the main risk for Glencore is corruption. Indeed, the US Department of Justice, Serious Fraud Office and Swiss Government have opened investigations for corruption against Glencore. After analyzing the share price following these announcements, there is evidence that the stock price drops sharply on the short-run. Major shareholders are introduced to understand their potential reaction to reputational risk. Banks analysts’ opinion and ranking on Glencore are reviewed. The main commodities mined in the DRC are copper and cobalt. An interview with Mr Cauro, metal trader, provides a better understanding on copper and cobalt as well as commodities as a market. He also gives his opinion on Glencore and its reputational risk. The third part consists of a quantitative analysis that compares the performance of Glencore’s stock and the S&P GSCI Index as well as Brent crude oil price. This comparison is made in order to show what factors impact the share price on the longrun, beyond the reputation risk. The correlation test shows evidence that the share price is closely correlated with the price of commodities, especially crude oil. The conclusion allows all aspects of the analysis to be brought together in an open discussion. The recommendation is currently to buy the stock, regardless the reputation risk for various reasons explained further in this report.
Language
  • English
Classification
Economics
Notes
  • Haute école de gestion Genève
  • International Business Management
  • hesso:hegge
License
License undefined
Identifiers
  • RERO DOC 329866
Persistent URL
https://sonar.ch/hesso/documents/315010
Statistics
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