The London Stock Exchange stepped in to stop trading in Anglo-Russian mining company Polymetal (LON:POLY) for about 20 minutes on Tuesday after an order was put in at a price more than 700% higher than the opening trade. It is still unclear if this was a fat-finger trade or anything else. The suspension follows a dramatic 24-hours for the miner.
On Monday, Polymetal lost most of its board members, headed by chairman Ian Cockerill, amid rising condemnation over Russia’s attack on Ukraine. The exit included independent non-executive members Ollie Oliveira, Tracey Kerr, Italia Boninelli, Victor Flores and Andrea Abt. Only three of the original nine board members still hold their positions including chief executive Vitaly Nesis, brother of Russian billionaire Alexander Nesis who through his company ICT Group also owns the largest share in the company, and non-executive directors Konstantin Yanakov and Giacomo Bainzini.
International sanctions bite
Polymetal has been one of the Russian stocks most heavily hit by the Ukraine conflict, along with steel-maker Evraz (LSE:EVR) and a number of Russian banks. Initially just sliding lower in late February, shares eventually fell of the cliff after international sanctions started to bite and, more importantly, international condemnation of most things Russian intensified. Year-to-date Polymetal shares have lost over 85% in value.
But in a bizarre twist, Tuesday morning the LSE had to step in and stop trade after an uncharacteristic spike in the share price following the mass exodus of board members. The gold and silver miner last traded at 185.95 pence, up 7.79% on the day.
BlackRock pulling out after buying $12m in stock
Over the last week, the Polymetal drama was intensified by the news that asset manager BlackRock is pulling out of the stock – but only after it had recently spent more than $12 million to increase its stake in the mining company. BlackRock, which has been intensely promoting its ESG-friendly image over the last few years, doubled its holding to 10% on 25 February, a day after Russian troops entered Ukraine. Since then, BlackRock said that it had suspended the purchase of all Russian securities in its active and index funds.
Polymetal recently posted its trading update, saying that its operations have so far not been affected by sanctions and that it doesn’t expect that they will be in the future, particularly its outfits in Kazakhstan. The company operates nine mines extracting gold and silver doted across Russia and Kazakhstan. Most of them are located in Russia’s Far East. The company’s complete output of gold is likely to be bought up by Russia’s central bank this year after the bank said that it would protect domestic gold production in the face of international sanctions.
Over 70% of the company’s share float is in the hands of institutional investors. This included until recently BlackRock. Another 23.9% of the shares is held by Nesis’ ICT Group and a relatively small portion is in the hands of the company’s directors.
Sources close to Polymetal stressed to The Armchair Trader that the company has no involvement in the developments in Ukraine and that neither the founder or any of its key trade partners are subject to sanctions.
