£48bn: The value bullish brokers have given to Glencore

GLENCORE could be worth up to a fifth more than previously thought, according to bullish estimates by analysts, pushing its market cap value up to $78bn (£47.8bn) if it floats successfully in May.

Analysts at Barclays Capital and Credit Suisse – both of which are on the deal – have suggested that the commodities trader is worth a maximum of $69.2bn and $68.6bn respectively, in addition to whatever it raises by floating.

This is sky-high compared to previous consensus valuations of $60bn. Glencore is looking to raise a total of $9-$11bn from floating in London and Hong Kong, with a quarter of the shares to be sold in Asia.

But the firm’s float comes at a choppy time for the initial public offering (IPO) market. Several IPOs have been cancelled in recent weeks, including Skrill, Euroset, ISS and Edwards, all citing market uncertainty.

Volatility among mining stocks could also contribute to a difficult environment, with Goldman Sachs (which is not on the Glencore deal) calling the top of the commodities boom in the medium-term last week.

FTSE 100 miners have seen their share prices bounce up and down over the last month: Xstrata, of which Glencore owns 34 per cent, has seen a 13.3 per cent change in price while Rio Tinto’s stock has fluctuated by as much as 16.8 per cent.

Such dramatic changes in price over the course of the IPO process – which kicked off last week and is expected to complete in late May – can make it difficult for investors to evaluate what they are being offered.