Thursday, November 12, 2009

IDX = Coal Stock Exchange

Trading value of nine coal-related stocks at Indonesia Stock Exchange (IDX) on Thursday, November 12 reached Rp3.5 trillion or about 63% of the total trading value on the market. That's why we call IDX with new name: Coal Stock Exchange. 
BUMI was still the busiest casino with trading value of Rp1.8 trillion. But Adaro Energy (ADRO) closed the gap with trading value of Rp585 billion. The third largest was Indo Tambangraya Megah (ITMG) with Rp241 billion and the new kid on the block, Delta Dunia Makmur (DOID), with Rp127 billion.
Some traders said "coal is just too HOT to resist." The combined market capitalization of six major coal players on IDX is currently US$19.2 billion, declined 47% from their peak last year of US$36.5 billion. Interestingly, BUMI is not the largest coal stock anymore, in terms of market cap. ADRO has taken over BUMI's number one spot with market cap of US$5.23 billion, followed by BUMI with US$4.7 billion, Bukit Asam (US$3.4 billion), Indo Tambangraya (US$2.9 billion), Bayan (US$1.85 billion), and Indika (US$1.16 billion).
Other traders said "but I'm bit worried about burning down of coal stocks." Why? 
Well, with the exception of BUMI which is 73% below its peak last year, others are currently traded less than 45% below peak. ADRO is even traded 13% below its peak. Why people were so optimistic about coal while the actual prices of thermal coal may not recover to 2008 level for sometime?
Coal stocks have surged substantially this year. BUMI, for example, recorded 465% gain since January 15. Adaro has tripled (+212%) this year. United Tractors +257%. They might be dreaming of similar gains in the next few months. Nothing wrong with that. But...

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