Overweight Coal Issuer Shares Occur Due To Several Factors


Overweight coal issuers have triggered several other companies to profit. One of them is a cement company that uses coal as production fuel.

Broker Mirae Asset Sekuritas Indonesia has estimated that the stock is overweight. There are several reasons why PT Indo Tambangraya Megah Tbk. (ITMG) became the mainstay.

The increase in coal prices could put pressure on cement issuers, thanks to analyst from Ciptadana Sekuritas Asia Michael Filbery. This can also be seen if the negative view of the gross profit of cement issuers will also increase.

Occurs due to the increase in fuel and energy expenses per tonne on a quarterly basis. Moreover, the current condition of the domestic cement market is still in a position of excess supply.

So to increase the market price is still sensitive to market share. The condition of overweight coal issuers also affected the condition of cement sector players.

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Average Increase in Shares of Overweight Coal Issuers

The current condition of coal is overweight, which is again set for an increase in price by Ciptadana Sekuritas. The assumption of the average coal price this year is at the level of US$ 180 per ton from the previous US$ 140 per ton.

The price increase is not without reason. The economic crisis in Europe due to the conflict between Russia and Ukraine is one of the reasons why this happened.

However, this condition is also taken positively for coal mining issuers. Where they get a fortune as a result of the increase.

The overweight rating followed the increase installed on Trimegah Sekuritas in 2022-2024.

The averages start from US$ 105, US$ 90, and US$ 80 per ton to US$ 200, US$ 160 and US$ 130 per ton.

The stock of this overweight coal issuer is expected to last for the next 1-2 years.

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Supporting Factors for Coal Price Increase

Overweight coal issuers are expected to continue in the next few years. As a result of the impact of the dispute between the two countries in Europe, several issuers were also affected.

There are several reasons why this happens.

  • Concerns about environmental, social, and governance (ESG) aspects. This results in a reduction in the supply of coal. Moreover, investment support for the issuer is limited.
  • Meanwhile, the second reason is solid global coal demand. This is because coal is a fuel that has an economical price compared to gas.
  • The high demand for electricity in the long term is also the reason for coal prices to continue to rise.
  • In addition, there are still trade sanctions that Russia has received, resulting in an impact of 16% of world thermal coal exports.

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ITMG shares are one of the issuers that have a fairly high dividend yield. Even at the global closing, the issuer was in the position of Rp. 27,275/share.

This is the reason why the shares of coal issuers are overweight for this year to the next few years. So that the impact will be felt on several issuers, one of which is the cement sector.


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