Glencore shares slump on their debut on Hong Kong Market Wednesday.
Shares in Glencore International PLC, the world's largest commodities trader, slumped 2.45 percent in their debut on the Hong Kong Stock Exchange Wednesday, mainly due to concerns that European debt problems and slowing growth in China will weaken global commodity demand.
Shares in Glencore closed at HK$64.9 ($8.3), down from the initial public offering price of HK$66.53. On Tuesday, Glencore rose 2.14 percent to end at 525 pence ($8.5) on the London stock exchange, still below its 530-pence issue price set last week.
The Switzerland-based commodities giant raised $10 billion last week through a London-Hong Kong dual listing as the world's largest IPO so far this year, giving it a market value amounting to $59 billion.
Ivan Glasenberg, CEO of Glencore, attributed the stock slump to the recent weakness in the global commodity market.
"Commodity prices have decreased considerably the past few weeks," he told reporters in Hong Kong Wednesday. "But the underlying fundamentals of the commodities market is relatively strong because of the tightening of supply."
Goldman Sachs Group on Tuesday raised its Brent crude price forecast by around $20 a barrel, to $120 per barrel for 2011 and to $140 for 2012, and advised investors to buy commodities such as cooper and zinc.
"Goldman Sachs' report might push the commodity prices rebound higher in the next few days, but in the long term, the market is still under the shadow of debt crisis in the eurozone and the slowing growth rate of China's economy," Wang Lixin, a nonferrous metals industry analyst at Umetal.com in Beijing, told the Global Times Wednesday.
Some experts fear that the listing of Glencore might make it more powerful in making acquisitions, which could push China's import commodity prices to new highs.
"As a big trader in the non-ferrous metals sector, Glencore is likely to influence the cobalt market, but unlikely to affect cooper or aluminum prices," Wang said.
