Glencore shares started trading on the Australian stock market on Wednesday, a boost to the ASX's standing as a global hub for mining stocks. The Swiss-based commodity giant, which has a market capitalisation of £69bn, is already listed in London and Johannesburg but chose to issue stock in Sydney to tap into a mining-savvy investor base. Glencore has issued Chess Depositary Interests, a secondary listing instrument, and is expected over time to join the top tier of Sydney-listed miners alongside BHP, Rio Tinto, Fortescue and Newmont.
Chief executive Gary Nagle said Glencore expected strong demand from Australian investors, having met several shareholders keen to invest in recent days. "You want to go to markets where mining is appreciated and mining is understood," he said, describing Australians as "smart investors". The stock quickly rose to A$11.38 from its A$11.20 debut price before easing to A$11.22 by midday in Sydney. Its London shares have gained more than 43 per cent this year, but JPMorgan analysts said the group trades at a significant discount to peers including Rio and BHP.
The float comes after data centre operator Firmus abandoned its $30bn IPO last week following poor investor demand. Glencore employs 16,000 people in Australia, with coal, zinc, copper and nickel assets. The stock offers Australian investors exposure to a copper player not tied to iron ore, and Nagle described the group's large commodities trading division as "a differentiator" versus peers.
Nagle also said Glencore had met some of Australia's large superannuation funds, many of which have avoided coal in recent years. He was confident the company's plan to wind down its Australian coal assets over time aligned with those policies, arguing that the global energy crisis triggered by the Middle East conflict had "sharpened people's minds".
Source: Financial Times Companies · Summarized by HeadlinesBriefing