LONDON Signs of firms testing investor demand for new listings only a week after volatility derailed two of Europe's largest offerings so far this year will embolden Glencore GLEN.UL as it presses ahead with its own mega-float.
If all goes to plan, the commodities giant could be expected to kick-start its listing with an intention to float early next month, soon after an April 1 deadline for sell-side analysts to complete their research notes on the company.
Assuming Glencore follows the usual four week initial public offering (IPO) process, that would see the world's largest commodities trader completing the listing in early May.
"The IPO market is open, investors have money to invest but they are going to be selective. Attractive companies, larger cap companies in many ways will find it easier to IPO than smaller cap companies because investors do value liquidity," one equity capital markets banker said.
Expectations of a flurry of pre-Easter share offerings were dented last week as volatility in global stock markets spiked on fears of a Japanese nuclear crisis and over rising unrest in North Africa and the Middle East.
That uncertainty led Danish outsourcing group ISS ISSHOI.UL to pull a potential $2.8 billion float hours before its expected debut on the Copenhagen exchange, while French media group Lagardere (LAGA.PA) canceled a planned listing of pay-TV channel Canal+.
"There are always going to be periods of higher volatility in which the market shuts down and sometimes they coincide with weeks in which someone intends to launch or price their offering that is just the unavoidable reality," the banker said.
But markets have rebounded this week, with European shares rising to their highest levels in almost two weeks on Thursday while the VDAX-NEW volatility index .V1XI, one of Europe's main investor fear gauges, has retreated.
"It was very unfortunate timing, the market seems to have pulled through it and performed better this week," said a second banker working in equity capital markets said on Thursday.
"You never know what is round the corner ... but the fact the market has been as strong as it has this week is bringing back a bit more confidence. To get some IPOs done and trading up will be an important moment for the market."
In a sign of the times, a secondary offering of Turkey's Finansbank (FINBN.IS), a National Bank of Greece (NBGr.AT) unit, was also delayed due to market conditions.
Glencore has played a cagey game since raising expectations of an IPO by briefing sell-side analysts, making it clear that listing is just one of the options it is considering. Some estimates say an IPO would value Glencore at $60 billion.
But the firm looks to be plowing ahead with its IPO plans, with its top management meeting big U.S. fund managers earlier this week and moving closer to hiring a group of banks to help run the planned float.
Although the latest flurry in the European IPO market involves far smaller deals than the potential $10 billion float Glencore is considering, it is seen as an encouraging sign as the group weighs up whether to push the button on its long-awaited listing.
Polish financial intermediary Open Finance successfully completed a 445 million zloty ($155 million) Warsaw listing on Tuesday, while Dubai-based oilfield services firm Topaz Energy and Marine is pushing ahead with its $500 million London IPO, expected to be completed next week.
This week has also seen Russian firms mobile retailer Euroset, bank Nomos and real estate developer Etalon joined sugar and pork producer Rosagro in launching plans to list in London, with the four eyeing a combined total of $2.5 billion.
Indian paper maker BILT also launched IPO pre-marketing, while digital sports media company Perform group opened the books on its up to 200 million pound ($324 million) listing on Thursday and Austrian aluminum group AMAG set a price range for its 535 million euro ($753 million) float.
British vacuum technology firm Edwards is also set to open the books on its listing on Friday.
($1=2.865 Zloty)($1=.6165 Pound)($1=.7109 Euro)
(Editing by Alexander Smith)