Kazakhmys shares soar on tenge tantrum
Shares in miner Kazakhmys are up by nearly 26 per cent on news of a currency devaluation in Kazakhstan.
It will comes as no surprise that Kazakhmys is located in that country, and the central bank announcement is responsible for the surge in shares. Kazkahstan's is the latest in a series of commodity currencies to depreciate.
Roughly three quarters of Kazakhmy' costs are in the local currency.
The FTSE 250 listed company is known as one of London's most shorted stocks. Investors take a short position by loaning out a stock from a broker and selling them.
The investor will at some point have to return that stock to the broker – So they're taking a bet that the value of the stock will fall.
With such a small free float and large short positions, the stock's value has rocketed.
Kazakhmys's neutral rating has been reiterated by Westhouse Securities following the news.
But the downside for Kazakhmys is that last time Tenge devalued, there was a massive inflation hike – killing all the benefits #KAZ
— Dan Coatsworth (@SharesMagDan) February 11, 2014