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Nickel, metals lead bullish rally in Indonesian mining stocks
Metals are leading the rebound in Indonesia's mining stocks, primarily on the back of positive sentiment over nickel in connection with the general global shift toward EV development, leaving coal inching up despite winter demands.
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A view through a pair of glasses shows a man passing before a giant stock ticker display on March 2, 2019 at the Indonesia Stock Exchange (IDX) in Jakarta. (Antara/Galih Pradipta)
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ndonesian mining stocks have reversed the bearish trend to end in green territory on Wednesday while leaving other sectors in the red, as new developments spur investors’ hopes for growth in metals and coal demands.
The mining sector gained 3.6 percent year-to-date (ytd) to become the sole index out of nine sectorial indices on the Indonesia Stock Exchange (IDX) to book positive growth, the bourse’s data showed on Wednesday.
Other indices have booked negative growth so far this year, with agriculture and consumer goods falling respectively 19.16 percent and 9.49 percent. Meanwhile, the Jakarta Composite Index (JCI) also remained 9.85 percent down in value as of Wednesday.
“Expectations over recovery in manufacturing activities drove potentially higher demand” for mining products and generated positive sentiment for mining stocks investment, analyst Robertus Yanuar Hardy of Kresna Sekuritas said on Tuesday.
Countries around the world have begun restarting several industries entering the fourth quarter even as many continue to battle the pandemic. These “restarts” have driven up demand and prices for raw materials, including metals and coal that are among Indonesia’s top exports.
Statistics Indonesia (BPS) data show that mining exports reached US$1.55 billion in October, up 16.98 percent from September in the sharpest rise compared to its three other major export industries: oil and gas, agriculture and manufacturing.
Big metals companies led the rise in the mining index as their commodities’ prices began recovering much earlier than coal prices.
