Glencore goes straight into FTSE

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The Independent Online

Commodities giant Glencore will tonight become the first company in 25 years to be fast-tracked into London's FTSE 100 Index after official trading in its shares got under way today.

Billionaire boss Ivan Glasenberg, whose personal stake in the group is worth around £5.8 billion, took part in the London Stock Exchange's market opening ceremony this morning to mark the City's largest flotation.

But Glencore shares are still lower than their starting price of 530p after dropping to a low of 506p during conditional trading last week before recovering to around 524p today.

Glencore will add to a resources sector that already makes up around 15% of the FTSE 100 Index when it joins the list overnight - bumping engineering firm Invensys to the FTSE 250.

Glencore is the world's biggest commodities trader, with products including oil, coal, gold and foodstuffs, but also owns a number of mines worldwide.

Founded by US tycoon Marc Rich in 1974 and owned by its traders since a management buyout in 1994, Glencore holds a 35% stake in miner Xstrata, as well as having a 9% holding in Russian aluminium giant Rusal.

The group, which has a market value of more than £36 billion, is the third company to be admitted under the FTSE 100 fast-entry rule.

The Switzerland-based trader, which raised £6.2 billion from the listing, is expected to use the cash and its shares to fund a buying spree.

The float made paper multi-millionaires out of some 485 traders at the firm.

Glencore shares were up 2% today as commodity prices recovered falls triggered by concerns over Chinese demand and the strength of the eurozone economy.

David Buik, analyst at BGC Partners, said today's trading was a "muted performance".

But he added: "It may be folly to forget that this company has been hugely profitable over the years, aided and abetted by its 35% stake in Xstrata.

"It may take some months to make some real progress, but few doubt its aspirations."

Invensys, which will now trade on the FTSE 250 Index, is an engineering business that works with large industrial plants such as oil refineries, fossil fuel and nuclear power generation plants.

It also has a rail division which provides software-based signalling, communication and control systems to rail networks.