The recent news about the ban on nickel export on Indonesia made investors took positions over the stock of Nickel Asia Corporation. The company is seeing a positive outlook on this ban since there could be an increase in ore production in order to supply the demand in the market. In a span of 5 days, from September 2 to 6, a total of 706.93 million shares or equal to P3.063 billion were traded as data showed from the Philippine Stock Exchange. On Friday, shares closed at P4.32 apiece from P2.74 on August 30. This is up by 57.7% if we take a look at it week by week. The stock gained 94.6% for the year already.
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The reason why Nickel Asia’s shares were actively traded this week is because of the plan of the Indonesia government to impose a ban on its nickel exports next year. This will squeeze the supply and since Nickel Asia is one of the biggest suppliers of nickels in the country, this will benefit the company bigtime. Also, investors thought that there is a possibility of shortage and the nickel price would probably surge in the global market. Plus, the chance of Metallurgical Corporation of China’s plant to be closed because of spilled mine waste into the Basamuk bay of Papua New Guinea is very high and it would benefit the company as well.
Indonesia has recently announced that it would stop exporting nickel ores beginning January 1, 2020. This is considered 2 years earlier than what it previously disclosed so that it could produce resources in its own home. Meanwhile, the possible closure of Metallurgical Corporation of China is getting both local and foreign investors to become enthusiastic as they select the Philippines as the next alternative supplier of nickel in the global market. Indeed, investors took this as a positive impact and it could turn the future of this nickel company into something big.
The current move in the nickel market is expected to increase nickel production here in the Philippines. As of now, the country is the second-biggest supplier of this mineral, accounting for a fifth of the global nickel supply. The first-biggest supplier is Indonesia. Nickel Asia Corporation is supplying half of the nickel output here in the Philippines. During the second quarter of this year, the company reported an attributable net income of P566.11 million. This is 39.4% lower than the reported income of P934.28 million during the same period in 2018.