Stock of the day: Nickel Industries
Nickel Industries experiences significant market volatility following Indonesia's proposed royalty increase on nickel ore sales.
(AI video summary)
This video was created on 12 March for IG audiences by ausbiz.
ASX code: NIC
Nickel Industries faces market volatility
Nickel Industries has experienced significant market volatility, with its share price dropping by 20% before rebounding by 5% in Sydney trading.
This fluctuation follows Indonesia's proposal to increase royalties on nickel ore sales, impacting companies like Nickel Industries operating in the region. The proposed changes could lead to an $8 million increase in royalties from the Tangaya mine for the fiscal year (FY) 2024.
Consequently, Jefferies has lowered its price target for Nickel Industries to $0.80 while maintaining a 'hold' rating.
Investment considerations and risks
The nickel industry has been challenged by low-cost producers backed by China, impacting local competition. Investors should monitor price action closely and wait for stability before making decisions. While there may be speculative opportunities, a cautious approach is suggested given current market and geopolitical conditions.
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