'Last bear in town' Liberum ups Glencore to 'hold'

The brokerage pointed to a 24% drop in the share price in the last couple of months as the market repriced the stock's risk.

"Whilst sentiment could deteriorate further on trade war escalation and investigation developments, it is divorced from the reality of strong commodity fundamentals in China. We do expect demand to eventually roll over, but this is highly unlikely in the short term with the recent upswing in Chinese real estate.

"There are lack of near-term catalysts for us to be buyers, but if copper prices to move below $2.50/lb, chance of supply side response increases and would present a buying opportunity."

Liberum pointed out that following its upgrade of Glencore, there are no more 'sell' ratings on the street, which would normally lead to sharp price falls.

"However, even with our bottom of consensus forecasts of $2.50/lb copper and $75/t thermal coal in 2019, Glencore still yields an attractive free cash flow yield of 11% and this feels like a fair time to upgrade despite the ongoing equity and market risks."

Liberum has a 300p price target on Glencore, whose shares were down 1% at 301.95p at 1435 BST.