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Diego Vara/ReutersThe latest Market Talks covering Basic Materials. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0721 GMT – Indonesia’s coal-mining companies are likely to be weighed by weaker coal prices amid soft demand, CGS International’s Jacquelin Hamdani and Edward Halim say in a note. Weak supply-demand dynamics appear to undermine coal producers’ pricing power, the analysts say. They expect coal prices to stay under pressure for the next six to 12 months, given high stockpiles and renewables displacing coal in the energy mix in China. They cut their net profit estimates for United Tractors, Indo Tambangraya Megah and Bukit Asam by 4%-13% thanks to softer coal prices and higher costs. Coal companies are also unlikely to maintain their historically high dividend yields, they add, thanks to the earnings revisions. CGSI cuts their rating on the Indonesian coal-mining sector to underweight from neutral.([email protected])
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