Glencore's IPO: what the analysts are saying

Rob Edwards, MD, Metals And Mining Research, Renaissance Capital

Thy key for me is that they are increasing their stake in Kazzinc potentially up to 99pc so they have clearly identified that as an asset that they want to consolidate more of.

The market has got cash, we believe, for the right investments. We've seen IPOs get away in the last couple of weeks, although markets have been fairly volatile [...] People are not paying premium valuations at this point in the cycle.

It will get away. People want a different way to play the cycle and the business as a whole of mining, trading and selling commodities so this will definitely be a welcome addition in terms of a broader access to commodity markets."

People have to believe that this company can now go to the next level. They are looking for assets and people recognize that if you invest alongside Glencore you've got a fairly good chance of making money long term because these people are probably commercially the most savvy people in the entire commodities sector.

Cameron Peacock, Market Analyst, IG Markets

No one knows that China won't unravel. No one saw the [global financial crisis] coming. People who invest in the float could get burned but that's just market risk. Other than something like that, I don't see why it won't be a reasonable float to be a part of.

To me, the fact they are going ahead during this slight softness means they are very confident that prices will remain quite robust.

If you are willing to look past short term aberrations in the market, the outlook for commodities and stocks over the next 12 to 18 month period is very buoyant.

They are speaking to investor groups and it would appear they've had enough interest to be confident they can get the float away at a reasonable price and have a reasonable secondary market.

Paul Mumford, Cavendish Asset Management

It's not really for me, it's just not my sort of stock. In terms of valuation, they've been waiting for the most appropriate opportunity. It's not an area of the market I want to invest in because so much of the valuation depends on commodities. I prefer more simple companies.

Damien Hackett, Mining Analyst, Canaccord Genuity

It ought not trade with the same premium and success that pure mining companies like Rio Tinto have in the past or going forward.

I worry a little bit that a couple of billion dollars of this money being raised is going to pay out people who previously made this company very successful in the past and who have now gone.

I wonder how much transparency one is going to get on all that trading activity and how good mining analysts are going to be at understanding it.

I think it's going to be a spectacularly successful float. I suspect that after it settles into the market it may trade at the lower end of the range that people are forecasting.

Ion-marc Valahu, Fund Manager, Clairinvest

I'm not going to buy into the offering straight away, I'll see how the stock trades before deciding to buy the shares or not.

The company is one of the leaders in its sector and is very successful, but it's not clear where we are in the commodities market cycle, and whether commodities prices might ease off from their bull run.

Paul Renken, Mining Analyst, VSA Capital

They did actually make the decision to head toward some kind of public flotation back in 2005 because they realised their current limited partnership structure wasn't going to work for them if they chose to get even bigger. And also they wanted to move even more so into the upstream end where they actually get involved in the mining (of commodities) itself.

They have been working on this for several years now. It happens to be fortuitous for them that commodities prices are high. I'm not sure that it is the top of the cycle at this point because there simply are this many people that are trying to get a Western lifestyle.

Craig Yeaman, Fund Manager, Saracen Fund Managers

It is certainly something that we will look at. When you're looking at a company of this size coming onto the market, we would be neglectful if we did not at the very least consider it.

? Source: Reuters

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