Tim Seymour: While commodity fever has cooled substantially in the last few weeks, Glencore has still seen massive institutional demand for its newly launched shares.
Trading as GLEN in London, the global commodity trading house priced at 530 pence — about 85 cents — per share.
While the action after the IPO was what the London press calls “subdued,” the $11 billion float received more than $40 billion in bids, making it extremely oversubscribed.
The IPO also ranks as the biggest ever on the UK market, narrowly ahead of Rosneft’s $10.6 billion IPO five years ago.
GLEN is now worth $60 billion. When you consider that Marc Rich originally sold the firm to its current management team for $600 million, you can see how far the trading business has come.
And now, since GLEN is also the fifth-biggest metals company traded in London, trading and production have effectively merged.
There has been plenty of talk about how this IPO marks a top in the current commodity cycle. After all, these guys are some of the smartest in the world, so if they are cashing out now, maybe they know something the commodity bulls do not.
Watch commodity funds like iShares S&P GSCI Commodity-Indexed Trust ETF (NYSE:GSG):
Significantly, other London-listed miners like Xstrata and Rio Tinto plc (NYSE:RIO) are down this morning. Might be funds making room in their resource allocations.
Emerging Money provides insightful and timely information about the increasingly important world of Emerging Market investments. CNBC Emerging Markets Contributor Tim Seymour leads the team of Emerging Money to bring you cutting edge global news and analysis. About Tim Seymour: Tim is a founder of Emerging Money. He is a founder and Managing Partner at Seygem Asset Management, and The Emerging Markets Contributor to CNBC. Seygem Asset Management focuses on investing throughout the global emerging markets asset class. With a view that emerging and developing economies will continue to outpace the economic growth and advancement of developed economies, Seymour has devoted a career to investing in the dominant markets of tomorrow, today. Seymour’s career has included significant experience in both alternative asset management (hedge funds) and capital markets, having launched two hedge funds, and built the largest Russian broker dealer in the USA. Seymour started his career at UBS, focusing on international credit (cash, swaps, forex) in a specialized hedge fund group (New York). Seymour completed the firm’s training program after graduating with an MBA in international finance from Fordham University. Seymour received his undergraduate degree at Georgetown University.