Jakarta, CNBC Indonesia – Coal issuers’ share prices plummeted together in the first trading session on Monday (10/10), on the Indonesia Stock Exchange (IDX). This decline is in line with the trend of the index, which has remained exclusively in the red zone since the beginning of trading, weakening at one point even over 1%.
Three of the six broadcasters leading the JCI in the red zone are coal broadcasters, namely Adaro Energy (ADRO), United Tractors (UNTR), and Bumi Resources (BUMI). Cumulatively, the three issuers contributed -12.1 points more this morning to the weakening of the JCI.
By sector, coal led the decline in today’s trade with a correction of more than 15 points from the JCI, greater than the decline in the banking sector.
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At 11:00 WIB, of the 31 coal issuers on the exchange, 23 were trading in the red zone. Meanwhile, only four broadcasters are in the red zone, three of them having very limited or less than 1% strengthening. While the other four were traded stagnant.
The largest issuers have almost completely sunk into the red zone, with the exception of Bayan Resources (BYAN) which rose 0.44% this morning and Dian Swastatica Sentosa (DSSA) which traded stagnant.
In addition to the three broadcasters mentioned above, three other broadcasters that are the burden of the JCI movement are Indo Tambangraya Megah (ITMG), Bukit Asam (PTBA), Indika Energy (INDY) and Harum Energy (HRUM). The four broadcasters each lost over 2.75% this morning.
The decline in the JCI is in line with most Asian equity indices, also in the red zone this morning.
Last weekend, the Wall Street stock market also closed lower. The Wall Street crash on Friday further extended the negative trend in place since Wednesday of last week.
Problems of recession bring world coal prices down
US Stock Markets Collapsed The US Bureau of Labor Statistics announced an increase in the number of workers by 263,000 in September. This number is in fact much less than 315,000 in August. However, the unemployment rate only dropped slightly or dropped to 3.5% in September 2022 from 3.7% in August.
With the data still solid, the market also expects the hawkish policy of the US Federal Reserve (Fed) to last for a long time. This further reinforces the concerns of investors and the general public about the potential for a global recession.
IMF Chief Executive Kristalina Georgieva on Sunday (9/10/2022) said the risk of recession and financial instability continues to increase. She said the outlook for the global economy was “dark” given the shock caused by the Covid-19 pandemic, Russia’s attack on Ukraine and climate disasters on all continents.
The sentiment of recession has also haunted the coal market and has become the culprit of the drop in the price of black gold to the level of 380 US dollars per ton. The global recession is directly disastrous for energy commodity prices, as contracted economic output causes demand for energy to collapse and ultimately to collapse energy commodity prices if supply is not cut.
In the last trading last week, Friday (8/10/2022), the November coal contract price on Newcastle’s ICE market closed at US $ 380.15 per tonne. The price fell by 6.36%. The price is the lowest since August 9, 2022 or the past two months.
The weakening brought coal prices down from US $ 400 for the first time since August 12, 2022. In one week, coal prices fell 6.8% point-to-point. Coal prices also fell 12.6% per month, but are still up 69% in a year.
This condition is also shared by a number of analysts who expect coal prices to continue correcting, at least until this week.
Bank sector analyst Mandiri Ahmad Zuhdi estimates that the weakening of coal will continue. The price of black gold is expected to move into the USD 370-390 range this week.
“Most likely (coal prices) will continue the current downward trend. It turns out that the expectation of a recession will still have a very large impact on the decline in future demand,” Zuhdi, CNBC Indonesia, said.
RESEARCH TEAM OF CNBC INDONESIA
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