After being slammed, those who hold coal stocks grin today

Jakarta, CNBC Indonesia – In the midst of the Composite Stock Price Index (JCI) rising 1%, the majority of coal stocks managed to strengthen again or rebound at the close of trading today, Friday (8/10/2021).

Last Thursday, coal stocks tended to sink to a lower auto reject rate (ARB, -7%) in line with investors’ profit taking.

According to data from the Indonesia Stock Exchange (IDX), the JCI closed up 1.02% to 6,481.77, with a transaction value of IDR 15.60 trillion and trading volume of 28.42 billion shares.

Foreign investors in the stock market entered the Indonesian stock exchange with a record foreign net purchase of Rp 1.73 trillion in the regular market. Meanwhile, foreigners recorded a net purchase in the negotiating market and cash market of Rp 675.58 billion.

The transportation sector index (IDXTRANS) led the gains among other sector indexes, by 3.63%. In second place, there is the energy stock index (IDXENERGY) which rose 1.49%.

Here is the increase in the stock of the black stone today (8/10).

  1. Indika Energy (INDY), +7.96% shares, to Rp 2,170/share

  2. Adaro Energy (ADRO), +4.61%, to Rp 1,815/share

  3. ABM Investama (ABMM), +4.27%, to Rp 1,465/share

  4. Indo Tambangraya Megah (ITMG), +4.08%, to Rp 24,850/share

  5. Bukit Asam (PTBA), +3.73%, to Rp 2,780/share

  6. Atlas Resources (ARII), +3.23%, to Rp 320/share

  7. Golden Eagle Energy (SMMT), +3.06%, to Rp 202/share

  8. Golden Energy Mines (GEMS), +2.42%, to Rp 4,240/share

  9. Alfa Energi Investama (FIRE), +2.27%, to Rp 675/share

  10. Delta Dunia Makmur (DOID), +1.85%, to Rp 330/share

  11. Mitrabara Adiperdana (MBAP), +1.10%, to Rp 3,670/share

  12. United Tractors (UNTR), +0.87%, to Rp 26,125/share

  13. Prima Andalan Mandiri (MCOL), +0.57%, to Rp 1,760/share

  14. Borneo Olah Sarana Sukses (BOSS), 0.00%, to Rp 110/share

  15. Bumi Resources (BUMI), 0.00%, to Rp 86/share

  16. Main Energy TBS (TOBA), -0.90%, to Rp 550/share

  17. Bayan Resources (BYAN), -1.03%, to Rp 28,700/share

  18. Harum Energy (HRUM), -5.15%, to IDR 7,825/share

According to the data above, of the 18 stocks observed, 13 stocks rose, 2 were stagnant, and 3 weakened.

INDY shares became the most soaring, reaching 7.96% to Rp 2,170/share, after yesterday sinking to reach the lower auto rejection limit (ARB) of 6.94%.

In a week INDY shares rose 11.00%, while in a month jumped 57.82%.

Second, ADRO shares rose 4.61%, after sinking to ARB 6.97% on Thursday. In a week ADRO shares rose 1.97%, while in a month rose 34.44%.

Under ADRO there is ABMM shares which rose 4.27%. Yesterday, the stock tumbled 6.64%. In a week ABMM shares were pushed up 18.15%, while in a month it rose 12.69%.

After touching the highest level since 2008 at US$ 280/ton, coal prices have slumped in the last 2 days. This correction occurred because investors began to take profit (profit taking).

According to Refinitiv data, on Thursday (7/10/2021) the price of coal in the Newcastle (Australia) ICE market fell 4.70% compared to the previous day to US$ 224.90/ton. Meanwhile, on Wednesday (6/10), coal prices ‘freefall’ 15.71% to US$ 236/ton.

Despite the slump in the last two days, in a week the price of coal still rose 3.64%, a month rose 26.10%. Then, since the end of 2020 (year-to-date/ytd) coal prices have skyrocketed by 175.11%.

The recent surge in coal was supported by dwindling supplies amid increasing demand due to the opening of economic activity. Rising oil and natural gas prices also affected the performance of coal, which recently recorded an all-time high price.

The increase in natural gas prices is the main factor in the surge in coal prices. As natural gas becomes more expensive, the incentive to turn to alternative primary energy sources increases. One of them is coal.

In the past week, natural gas prices at Henry Hub (Oklahoma, United States) rose 5.67%. During the past month, the increase reached 26.07% and year-to-date it skyrocketed 126.8%.

In Europe, the cost of generating electricity with natural gas is EUR 89.4/MWh on 5 October 2021. With coal, the price is only EUR 58.06/MWh. This makes coal become the prima donna again, even in Europe, which upholds the issue of being environmentally friendly.

“Looking at the situation in Europe, natural gas can no longer compete with coal. As a result, the use of coal is increasing,” said the study by ELS Analysis, an energy consultancy based in Sweden, as quoted by Reuters.

On the other hand, turning to China, energy demand is still high amid a shortage of supply.

“The supply shortage will continue for some time. It will take time to increase domestic production in China, which has been decreasing for the past five years. I am not optimistic. The supply shortage will last maybe until the end of the year, or even February-March next year, ” said a trader in Beijing, as reported by Reuters.


[Gambas:Video CNBC]