UBS lowers target for Glencore following woes in DRC and Brazil

Analysts at UBS lowered their target price on mining giant Glencore on Friday as a result of an uncertain macro environment in the Democratic Republic of Congo following its recent presidential elections.

UBS, which also reiterated its 'neutral' rating on Glencore, dropped its target price on the stock from 360p to 300p after a recent poll revealed 68% of investors were rattled by the risks associated to the group's DRC business and a Department of Justice investigation into its Brazilian operations.

The DRC presidential elections, which took place on 30 December, which will yield preliminary results by Saturday, were viewed with great scepticism as more than 1m Congolese people were unable to vote in three opposition strongholds as a result of an Ebola outbreak.

Contested elections in both 2006 and 2011 both resulted in violent street protests.

Regarding the ongoing DOJ investigation, prosecutors in Brazil announced that Glencore was under investigation on suspicion of paying more than $15m in bribes to employees of Petrobras back in December.

The investigation has already led to the imprisonment of one former president, as well as some of the country’s most prominent business figures.

UBS expects Glencore's re-rating to take longer than its peers due to "stock-specific concerns lingering".