Investors worry over Glencore valuation

The shares closed on Thursday at 530 pence, exactly flat on a debut price in the middle of its indicated range.

“Basically, the valuation looks a little bit rich. They worked very hard to get a favourable price and one could argue the only reason it was up yesterday was support from the sponsoring banks,” analyst Nik Stanojevic at Brewin Dolphin said.

“I think the market feels the same way. It wasn’t as if they sold this thing really cheaply with the expectation it would go up 50 per cent on the first day.”

Unconditional trading begins on Tuesday in London, where Glencore’s offer of up to $11bn (£6bn) is set to be the largest listing on record, and Wednesday in Hong Kong.

Glencore, the world’s largest diversified commodities trader, has said there was strong demand for its stock and had enough buyers to cover its offering of up to $11bn within hours of starting the sale process earlier this month.

But many investors have also expressed concern over the outlook for commodities and fretted over the discounts that should be applied to take account of Glencore’s conglomerate structure and of the fact it has operated away from the public eye for 37 years.

“Perhaps the fact that the float has, despite being over four times covered, been met with broad scepticism and sobriety is a sign of underlying health in the metals market?,” analysts at Numis said.