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span class="caption" style="width: 398px;">Top choices: Activities at one of the coal mining sites owned by PT Adaro Indonesia in Balangan, South Kalimantan. Shares of coal miners are among the most preferred shares on the Indonesia Stock Exchange (IDX), according to IDX data. JP/R. Berto Wedhatama Shares in coal mining companies have become the most actively traded in the Indonesia Stock Exchange, indicating that coal shares remain the most sought after stocks in the market, a market official says.

Head of corporate listing division at the IDX I Gede Nyoman Yetna said in Jakarta on Monday that the transaction volume of shares of companies in general mining companies ranked first, with transactions reaching 302 billion, or 25.1 percent of the total transactions of 1.22 trillion last year.

Mining stocks, he said, were also the most frequently traded at 4.9 million times, followed by shares in the trading, services and investment and finance sectors.

“Trading of shares of coal mining sub sectors contributed an average of 70 percent to the transaction volume, value and frequency of the mining sector. The number of coal miners listed may be few, but they have given a significant role to support trading at the bourse,” Nyoman said during a conference on Monday.

According to Nyoman, only 17 coal mining companies are currently listed at the IDX, which has 442 firms divided in 10 sectors. According to figures available at the conference, four out of 17 coal mining companies are included in the top 20 market capitalizations; Adaro Energy at 14th place, Bayan Resources at 15th, Bumi Resources at 16th and Indo Tambangraya Megah at 17th. Meanwhile, in terms of trading value, Bumi Resources ranked at 9th, Adaro Energy at 10th and Indo Tambangraya Megah at 12th.

Coal mining companies earnings per share (EPS) were Rp 654, with a price-earning ratio of 18.7 times and a price to book value (PBV) of 6.1. The average price earning ratio (PER) of shares at the bourse stood at 12.7 and PBV at 3.6 times.

“The figures are in line with the outstanding growth of net profits of coal mining companies,” Nyoman said.

Indo Tambangraya Megah, for example, booked US$546.13 million in net profits in 2011, surging significantly by about 167 percent from $204.15 million in 2010. Meanwhile, state-coal miner PT Tambang Batu Bara Bukit Asam (PTBA) reaped Rp 3.09 trillion in 2011, increasing by 54 percent from Rp 2 trillion year on year.

The Jakarta index for the mining sector, which comprises 31 companies, closed at 2,741 on Monday, declining slightly by 0.24 percent from 2,747 last Friday. The Jakarta Composite Index (JCI) slipped 0.09 percent to 4,024 from 4,028 last Friday.

Nyoman said that the performance of coal miner stock companies in the bourse would be determined both by the companies’ business development and by governmental policies.

Chairman of the Indonesian Mining Professional Association Irwandy Arif said that increasing coal prices since 2006 had contributed to the growth of coal companies.

“The industry used to be dominated by multinational companies. Now, we see small, middle and even personal scale businesses,” he said.

Indonesia is estimated to have 28 billion tons of coal reserves. The government estimates this year’s national production of coal at 332 million tons, increasing from 275 million tons in 2010.

“However, the increase in production is not followed by an increase in demand. The domestic market is estimated to absorb only 82 million tons this year and 150 million tons in the next 10 years, still far from the national production estimation of 500 million tons,” Irwandy said.

Most Indonesian coal is exported to China and India.

“If we don’t improve our national demand, coal will only become a revenue driver,” said Irwandy.