Sign of a Major Commodity Top Approaching - Glencore’s IPO already fully covered

Glencore’s initial public offering is already fully covered, only hours after the world’s largest commodities trading house officially launched the process with the publication of its much awaited 1,600-plus page prospectus in London.
“Glencore is getting enormous interest,” said a person familiar with the deal. An investor added: “From what I hear, the order book is very, very, very busy.”

SS says - This reminds of the Reliance IPO which was super oversubscribed when we were approaching the major top in 2007.


The trading house on Wednesday announced it had secured the support of a roster of blue-chip “cornerstone” investors, including Aabar, one of Abu Dhabi’s sovereign wealth funds. The cornerstones invested $3.1bn.
Glencore priced its IPO at a level that gives it a valuation of $48bn-$58bn, or 480p-580p a share, shy of the average forecast of $62bn provided by the banks underwriting the offering.

SS says - It reminds me of CIC China buying into Blackstone IPO in Mid 2007.
You know where that trades now.


Following the issue of $7.9bn of new shares, the enlarged company will have a market value of $61bn at the mid-point of the IPO range.

Glencore will maintain its IPO timetable, over-subscribing the book in the next two weeks. The trader said on Wednesday it expected to announce the final IPO pricing on May 19 and that the shares would be admitted for unconditional dealings in London on or about May 24 and in Hong Kong on or about May 25.

Glencore declined to comment on Thursday.
The trading house has covered its order book of $10bn and the so-called “greenshoe”, or over-allotment, option of another $1bn. The rapid coverage of the book is unprecedented for an IPO of the size of Glencore. The trading house’s flotation is the largest ever in the London market and the third largest in Europe, only behind only the privatisations of Deutsche Telekom and Enel of Italy in the late 1990s.

Glencore has said it expects to become only the third company – and the first in 25 years – to enter the bluechip FTSE 100 index on its first day of trading.