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Glencore's $11 billion from its initial public offerings in London and Hong Kong will give the commodity trader considerable firepower for acquisitions and could preface a wave of consolidation in the mining sector, analysts say.
The commodity trader’s IPO was fully covered on its first day as investors crowded into what looks set to be the first company in a quarter of a century to jump directly into the FTSE 100.
However, with commodity markets collapsing on Thursday, led by a strengthening dollar and a $10 drop in the oil price, some analysts suggest that the float has come at the top of the market.
Around half of the IPO money is already set aside to buy a larger stake in Kazzinc, which owns zinc assets in Kazakhstan and Russia.
Many in the markets also believed that the Swiss group would also look to use its capital injection to complete a merger with Xstrata, another diversified mining group in which Glencore has a 34 percent stake. Glencore CEO Ivan Glasenberg has publicly stated his preference for such a deal.
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