Glencore makes weak Hong Kong debut

Shares in Swiss commodities giant Glencore opened 2.8 percent lower in their Hong Kong trading debut Wednesday, following a tepid launch in London for the year\'s biggest IPO. The firm\'s shares touched HK$64.65 ($8.31) in early trading, down from their HK$66.53 IPO price, with the stock at HK$64.75 an hour later. Despite the sluggish start, Glencore Chief Executive Ivan Glasenberg said he remained \"bullish\" on the listing\'s potential. The world\'s biggest commodities trader by revenue raised about $10 billion ahead of the dual listing. \"We are still bullish with commodities and the strength in the commodities market,\" he told reporters at the firm\'s listing ceremony in Hong Kong. \"At the end of the day, the demand for commodities still continues robustly. \"The big question is whether the big mining companies in the world will continue to increase production to match the demand in Asia,\" said Glasenberg, who flew in from London. Glasenberg rejected suggestions the listing\'s weak start was tied to a recent dip in commodities prices, saying the timing was \"irrelevant.\" \"We thought it was the time to become a public company, and this was just the time,\" he said, adding that \"it\'s irrelevant the actual time of listing... The underlying market is still very strong.\" Hong Kong brokerage Wing Fung Financial advised investors to hold on to the stock given the likelihood of rising commodity prices. \"Although there is some correction in the commodity market recently, most of the prices are (still) higher than (that of) last year. We expect the prices will rise after correction,\" it said, according to Dow Jones Newswires. The Swiss company, which posted revenue of $145 billion in 2010, deals in a range of products including oil, coal, gold and foodstuffs, but also owns a number of mines worldwide. The dual listing values Glencore at nearly $60 billion. Glencore shares in London sank to 525 pence ($8.49) by the close Tuesday, or 0.84 percent below their IPO price of 530 pence each, despite the float being among the most anticipated of the year amid soaring commodities demand in Asia. Glencore sold 31.25 million shares in the Hong Kong offer, with the retail portion representing just 2.5 percent of the total sale, while the remainder was sold in London. It plans to use funds raised by the listing to pay down debt, boost its stake in Kazzinc, a zinc producer with core operations in eastern Kazakhstan, and finance other projects to expand its business. The commodities behemoth has said it secured $3.1 billion from so-called cornerstone investors, including sovereign wealth funds in Singapore and Abu Dhabi, who have subscribed to 31 percent of the shares on offer. The firm earlier described its secondary listing in Hong Kong as a means to build a \"long-term mutually beneficial relationships\" with the city\'s investors, and enable it to draw on demand from resource-hungry Asian markets, with China and India increasingly keen on resources to power their economies. Founded in April 1974 by trader Marc Rich, Glencore operated initially out of an apartment in central Switzerland\'s Zug canton before quickly emerging as a major player in commodities trading. From metals, minerals and crude oil, the group moved into agricultural goods and started in the late 1980s to expand to owning mines.