Glencore made a steady market debut on Thursday, with shares trading just above the widely expected launch price of 530 pence, giving the commodities trader the platform it wants to make acquisitions.

Initial grey market, or conditional, trade showed the shares changing hands at more than three per cent above the offer price, indicating appetite for the stock after many investors were left out after Glencore was flooded with orders for its shares. But the stock pared those gains, changing hands at 538 pence by around 0853 GMT, up just over one per cent.

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 $11 billion within hours of starting the sale process earlier this month. By the time order books closed a day early on Tuesday, it had enough orders to cover its offer more than four times, according to one source close to the deal, meaning it received orders totalling more than $40 billion.

But some investors have said strong demand in London's largest ever public offering was largely due to the relatively small amount of shares being sold, to the presence of cornerstone investors and to substantial sales to tracker funds who are forced to own companies in the main index.

At the offer price of 530 pence, Glencore has a market value of 36.7 billion pounds ($59.3 billion).

'The share price range was too high, full stop, as far as we were concerned,' said one UK equities manager, at a house running more than 200 billion pounds of assets.

'Put another way, had this been a 500 million pounds company, it would have had no chance of achieving the rating it is floating on.'

Glencore, which is also floating in Hong Kong, will be listing a 16.4 per cent stake, assuming no overallotment and no conversion of its convertible bonds. Its current shareholders, including chief executive Ivan Glasenberg, will retain a stake of around 80 per cent.

Many investors have also expressed concern over the outlook for commodities, particularly after this month's sell-off, and fretted over discounts that should be applied to take account of Glencore's conglomerate structure and of the fact it has operated largely away from the public eye for 37 years. The final decision to price at 530 pence per share, in line with earlier market expectations, came after fund managers said any price above 535 pence could see the shares drop in the immediate aftermath of the listing.       

Analysts on Thursday said the 530 pence per share level was realistic and should indicate strong aftermarket support.

'Obviously everything is priced to do well. I don't know whether five to ten per cent upside is in the bag or not, but certainly they are trying to please investors with the price,' analyst Tim Dudley at Collins Stewart said.

'I get the impression that on a demand/supply basis there is a lot of interest in the stock and people have probably been scaled back. Whether people will rush to try and sort out that imbalance today or wait and buy over time it is hard to say.'

Liberum, one of the banks advising Glencore, said in a morning note that the listing could mark the end of a 'mini sell-off in both the sector and broader commodities'.

The group's top executives and cornerstone investors are tied in through lock-ups of at least six months, but share performance will matter to Glencore, particularly if the company is to use the offering as planned to pursue acquisitions, not least any potential offer for peer Xstrata.

Glencore's market value will propel the commodities trader straight into London's FTSE-100 index of bluechip shares, making it only the third ever company to do so.

With a 10 per cent overallotment option likely to take the total size of Glencore's offering to $11 billion, it is set to be London's largest-ever listing, overtaking Russia's Rosneft, which raised $10.6 billion in 2006. It is already the biggest ever on the so-called premium listing segment of the London bourse.

The 23 banks working on Glencore's float will get a cut of the biggest fee pot in at least a decade, potentially totally $275 million if the commodities trader raises the full $11 billion, and a full commission of $82.5 million is paid out.

Citigroup, Credit Suisse and Morgan Stanley are the joint global coordinators for the offer, joined by another 20 banks in lower ranking syndicate roles.

Unconditional trading begins on Tuesday in London and Wednesday in Hong Kong, where Glencore is also listing.

The Hong Kong allocation of the offer is 2.7 per cent, with shares priced at HK$66.53.-Reuters