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Highlights
- Fund manager Elliott Associates is seeking US$456 million in damages from the London Metal Exchange (LME) following the suspension and cancellation of nickel trades after a massive short squeeze in March.
- The lawsuit was filed in the High Court by two Elliott vehicles against the LME on 1 June.
Fund manager Elliott Associates is seeking US$456 million in damages from the London Metal Exchange (LME) following the suspension and cancellation of nickel trades after a massive short squeeze in March on the platform owned by Hong Kong Exchange and Clearing Ltd.
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According to LME’s parent company Hong Kong Exchange and Clearing Ltd (HKEX), the lawsuit was filed in the English High Court by two Elliott vehicles against the London Metal Exchange (LME) and its subsidiary LME Clear on 1 June. LME has been widely criticised for its decision of halting trading and cancelling bets on 8 March due to volatility that saw nickel prices double to more than US$100,000 a tonne within hours due to Russia’s invasion in Ukraine.
Since the crisis, the nickel market has been suffering due to volatility and low liquidity. The move by the world’s largest activist hedge fund has further increased the pressure on the LME and it is also facing a review by UK regulators after it undid billions of dollars of transactions and suspended trading for over a week in March.
Elliot Associates claims that the trade suspension was unlawful on the public law grounds and violated its rights. However, LME has dismissed the claim in its statements. Last month, it claimed to propose measures to improve transparency and stability in the Over the Counter (OTC) metals market.
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Let us look at 3 FTSE 100-listed nickel stocks.
Anglo American Plc (LON: AAL)
With a market cap of £51,496.75 million, the global mining company Anglo American Plc has a portfolio that covers diamonds, nickel, copper, iron ore, and metallurgical and thermal coal has given its shareholders a return of 22.17% to it shareholders in the last one year, as of 6 June 2022. The share of the FTSE 100-listed mining company was trading at GBX 3,976.50, up by 3.29%, at 10:15 AM (GMT+1) as of 6 June 2022, and its YTD return stands at 31.85%.
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Glencore Plc (LON: GLEN)
With a market cap of £68,835.80 million, Glencore Plc is considered as one of the world’s largest globally diversified natural resource companies. It has given its shareholders a return of 63.36% over the last one year as of 6 June 2022. The share of the FTSE 100 listed commodity trading and mining company was trading at GBX 539.40, up by 3.00%, at 10:15 AM (GMT+1) as of 6 June 2022, and its YTD return stands at 43.83%.
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Rio Tinto Plc (LON: RIO)
With a market cap of £71,933.66 million, the global mining group Rio Tinto Plc is engaged in mining and processing of prominent mineral resources. It has given its shareholders a negative return of 4.40% in the last one year, as of 6 June 2022. The share of the FTSE 100-listed commodity trading and mining company was trading at GBX 5,946.00, up by 3.27% at 10:15 AM (GMT+1), as of 6 June 2022, and its YTD return stands at 21.54%.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
