Coal Stocks at the Edge of the Horn, Beware of Boncos

Jakarta, CNBC Indonesia – The spurs of the shares of coal issuers seem to be starting to fade lately. At the close of trading last Monday (15/11), major coal stocks or big caps (large market capitalization) were busily sinking into the red zone amid news from the recent climate conference results indicating a bleak future for the coal sector. coals.

In addition, another factor that may also affect the current correction in coal stocks is because investors continue to take profit-taking actions because coal stocks have soared this year.

In the midst of the current negative sentiment, starting from countries’ targets to reduce global carbon emissions to banks that are committed to starting to stop coal financing, what is the outlook for coal issuers’ shares in the future?

If you look at historical data, the performance of coal stocks has indeed been sluggish at least in the last month. (See the table below).

Performance of Major Coal Stocks

Kode Ticker

Last price

% Daily

% Per Month

% Year to Date (Ytd)

ITMG

19325

-6.98

-25.67

39.53

INDY

1615

-6.92

-29.17

-6.65

ABMM

1430

-5.92

-4.67

88.16

EARTH

66

-5.71

-24.14

-8.33

PTBA

2510

-5.64

-11.31

-10.68

GEMS

4050

-5.15

-5.15

58.82

ADRO

1610

-4.45

-13.14

12.59

HRUM

7775

-3.12

-4.89

160.91

DOID

292

-2.67

-12.57

-17.05

UNTR

22275

-2.3

-12.65

-16.26

BYAN

25925

-0.29

-8.55

67.53

Source: Indonesia Stock Exchange (IDX) | Last price per 15 November 2021

Shares of PT Indika Energy Tbk (INDY), for example, fell 29.17% in a month, the highest among other big cap coal stocks. In line with the downward trend, INDY’s shares have been minus 6.65% since the beginning of this year (year to date/ytd). Before touching the current price of Rp 1,615/share, INDY’s shares had penetrated Rp 2,330/share in mid-October.

Then, the shares of PT Indo Tambangraya Megah Tbk (ITMG) also fell 25.67% in a month. However, on a ytd basis, this stock still jumped 39.53%.

In the midst of coal cement that continues to decline, the price of coal itself continues to decline, after soaring high throughout the year. Yesterday, Newcastle coal futures fell 1.02% to US$ 145.75/ton, as China’s coal production in October rose to its highest level since March 2015.

This marks a 5 day straight downward trend.

Within a month, coal prices fell 39.61%. However, ytd the price of the black stone still jumped 78.29%.

For information, the world’s largest producer and consumer of coal produced 357.09 million tonnes in October, up 6.88% from September, according to data from the National Bureau of Statistics.

Total production for the first 10 months of 2021 was 3.3 billion tonnes, up 4% (year-on-year/yoy) compared to the same period last year.

China’s high coal production is the result of Beijing’s move to approve expansion of more than 153 coal mines. The expansion is intended to add 55 million tons of coal production in the fourth quarter.

China’s central government is trying to end the electricity shortage by supplying more coal. Another step is to urge local governments to reopen mines that were closed due to permit issues after fixing the problem.

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