Glencore valuation clouded by 'black box' trading unit

London

GLENCORE plc, the commodity trader that lost about a third of its value on Monday, is worth either US$98 billion or US$26 billion, depending on which analyst you ask.

At Sanford C Bernstein, price targets published by Paul Gait suggest that the Baar, Switzerland-based resource company can rally sevenfold to 450 pence, the top end of predictions tracked by Bloomberg. At the bottom, Nomura Holdings Inc's 120-pence forecast implies a market value that is US$72 billion lower.

The dispersion shows the difficulty in valuing a company caught between China's slowing economy and mounting concerns about its debt load. In addition to diverging views on copper prices, questions about how to evaluate Glencore's trading business, unique among big mining companies, are muddling the equation, according to Clarksons Platou Securiti…