Shares in Glencore International fell as much as 3 per cent on their Hong Kong trading debut today, dented by concerns over valuations and the outlook for commodities after a lacklustre start in London the previous day.
The dual listing in London and Hong Kong puts an end to the drawn-out process of taking the 37-year old commodities trader public at a time when prices for copper, oil and other raw materials have been falling sharply.
Glencore CEO Ivan Glasenberg - an intense and ambitious former coal trader - sounded bullish on the outlook for commodities and blamed the first day performance to general weakness in stock markets around the world.
"Commodity prices have decreased considerably the past few weeks," Mr Glasenberg told reporters after the listing ceremony at the downtown offices of Hong Kong Exchanges and Clearing Ltd.
"As you know all markets around the world have decreased in prices. I think we're just following the rest of the markets," said Mr Glasenberg, whose 15.8 per cent stake is worth more than $9 billion on paper.
By 0336 GMT, Glencore shares were trading at HK$65.15 compared with the offer price of HK$66.53. Last week, Glencore raised $10 billion through a London and Hong Kong initial public offering, giving the Swiss commodities trader firepower for acquisitions.
Hong Kong's Hang Seng index has fallen about 2 per cent since it set the final price late on May 18th.
Glencore's London-listed shares were stuck under water on their debut yesterday, dashing hopes of a strong start after it set a mid-range flotation price for London's largest-ever offering.
Mr Glasenberg, who flew straight after the London listing ceremony to attend the Hong Kong event, handed a miniature metal truck to the Hong Kong stock exchange as a memento. In return, Glasenberg received a crystal bull.
He delivered a short message ahead of the debut, saying he hoped Glencore would give Hong Kong investors the return they expect.
However, retail investors in Hong Kong were not overly excited, saying they found the price expensive.
"Retail investors are not too enthusiastic about Glencore as they have been more focused on penny stocks with small market capitalisations recently," said Joseph Fong, an associate with Ping An China Securities.
"Glencore is too big for retail investors to have big profit on day one," added Mr Fong, who owns less than 1,000 shares in Glencore.
Founded in 1974 by Marc Rich, Glencore has grown into the world's largest diversified commodities trader, with subsidiaries employing tens of thousands and an oil division with more ships than Britain's Royal Navy. It owns 34.5 per cent of London-listed miner Xstrata.
Commodities price volatility in recent weeks prompted market worries over the IPO, but Mr Glasenberg said two weeks ago that the decline in commodities was "due to some froth", playing down the impact on the listing.
Citigroup, Credit Suisse and Morgan Stanley are the joint global coordinators for the offer. In all, 23 banks were involved in the IPO, with a potential fee pool of $275 million.
Reuters
