Glencore International, the Swiss commodities trader that sold $10 billion (R69bn) of stock yesterday, gained as much as 3.8 percent on its debut in London after demand overcame a rout in raw material prices.

Shares in Glencore, which were sold at £5.30 (R59.47) apiece, rose as high as £5.50 and traded up 1.7 percent at £5.39 as of 10.33am in London. That gave the company a market value of £37.1bn.

Glencore said it had sold 1.14 billion shares in its initial public offering (IPO) in London and Hong Kong.

“They could have priced this much higher, there is very strong demand there,” Fairfax IS analyst John Meyer said.

“This is an amazing deal, it’s a great company, it’s got consistent long-term growth.” Meyer said the stock might rise as high as £6.50 in the short term.

The IPO attracted investors including hedge fund BlackRock and Abu Dhabi’s sovereign wealth fund. Glencore, ending three decades of operating as a closely held partnership, announced the sale three weeks before a commodities slump wiped $99bn off the market value of an index of raw materials in five days.

“Commodity prices are heavily down but still I think investors are looking for the longer term,” said Eugen Weinberg, the head of commodity research at Commerzbank. “Commodities are still in a very long- term upward move.”

Glencore’s market value positions it behind Anglo American as the seventh-largest mining company. Four analyst reports last month, from banks advising Glencore on the IPO, estimated its value between $52.3bn and $68.7bn.

The final sale price of £5.30 a share was at the midpoint of the £4.80 to £5.80 range set by Glencore on May 4. Stock in the Hong Kong portion of the offering was sold at HK$66.53 apiece (R59.28), Glencore said.

“Nothing would’ve done sentiment worse than if there was an immediate mark down,” James Bevan of CCLA Investments said. He didn’t buy stock in the offer. “I’m absolutely confident the share price goes up in the immediate term, but I’m very uncomfortable about what happens thereafter.”

A total of 2.7 percent of the offer was sold to investors in Hong Kong and some institutional investors elected to take shares on the Hong Kong branch of Glencore’s register.

Glencore chief executive Ivan Glasenberg is seeking funds for growth. He said last month that there was “good value” in a potential merger with £42bn mining firm Xstrata, in which Glencore owns 34.5 percent. Last week he was also seeking to expand Glencore’s grains unit in the US and might acquire oil refineries. “Glencore’s offer has seen substantial interest from investors around the world and was significantly oversubscribed throughout the price range,” Glasenberg said.

Glasenberg owns the largest stake at 15.7 percent, valued at about $9.3bn. – Bloomberg