Glencore has planned a $10-billion float on the Hong Kong stock exchange.MIKE CLARKE
Although some naysayers have suggested that the initial public offering of Glencore International PLC looked like it might define the top of the commodities market, you have to wonder if Glencore is going to get the last laugh.
On Wednesday, the price of the offering was finalized at £5.30 a share - the middle of the company's initial range of £4.80 to £5.80 a share, according to Bloomberg News. The shares will debut in London on Thursday, marking the biggest IPO since General Motors Co.'s IPO in November.
When Glencore announced its plans to go public in mid-April, commodity prices were well on their way to a post-recovery high - and precious metals like gold and silver were hitting record highs. This raised suspicions that this savvy, somewhat secretive Swiss-based commodities company was timing things in its favour.
The recent swoon of commodity prices looked like some sort of confirmation that the market was taking the IPO plans as a sign of the top. Since mid-April, the Reuters/Jefferies CRB index of 19 commodities fell 7 per as of yesterday, with silver and crude oil falling particularly hard.
However, Glencore's timing might be just fine after all, given that its shares will be hitting the market during a nice rebound for commodities. The CRB index jumped 2.3 per cent on Wednesday, marking its biggest one-day gain in two months. If this rebound carries into Thursday activity, the Glencore debut might be noteworthy for more than just its size.
David Berman