Gold Prices and Metal Commodities Boost Mining Shares

JAKARTA. Mining stocks are showing a fairly positive performance at the moment. When calculated from the end of last year to Tuesday (18/8), the mining sector index recorded a decline of 8.01%.

In this way, this sector index becomes the sectoral index with the second best performance after the consumer goods sector stock index, which only fell 4.88% from the beginning of the year. During the same period, the Jakarta Composite Index (JCI) was recorded to have weakened by 15.94%.

Sebastian Tobing, Head of Research at Trimegah Sekuritas, assessed that the minimal correction in the mining sector index was due to sentiment on strengthening gold prices. Evidently, the stock performance of a number of gold issuers was positive.

PT Merdeka Copper Gold Tbk (MDKA) shares occupied the position of champion in mining shares with the highest increase, namely 74.77% ( see table ). MNC Sekuritas analyst Catherina Vincentia added that the strengthening of the mining sector index was not only supported by the increase in the price of gold commodities. The increase in industrial metal prices, such as tin and nickel, also raised mining share prices.

The increase in tin and nickel prices was not as high as gold. But the trend is positive. This increase was supported by demand for nickel and lead for the development of electric vehicles. Meanwhile, the price of gold is influenced by the transfer of assets to safe havens .

A number of coal issuers also experienced recent gains. although the performance is not as shiny as gold miners. “For coal, if the economies of China and India continue to improve, then prices can go up again,” said Sebastian, yesterday.

Best Performing Mining Shares Price (Rp) Change YtD (%) MDKA 1,870 74.77 DSSA 20,400 47.03 MBAP 2,890 45.96 PTRO 1,865 16.20 CITA 1,960 12.00 HRUM 1,440 9.09 PSAB 278 6.92 TOBA 368 2.79 INCO 3,740 2.75 SURE 2,900 -1.69 Source: Bloomberg

Meanwhile, Catherina sees the potential for an increase in coal prices in the second semester. The trigger will come from requests from China. Prices can rise as winter approaches. “The increase was also due to the return to business activity in the biggest importing countries such as China,” he said.

Based on historical data, the increase in demand for coal in the third quarter will boost a number of coal stocks. However, the coal commodity is still shrouded in negative sentiment, such as the green campaign implemented by European countries.

MNC Sekuritas recommended shares of ADRO, PTBA, and ITMG. For metal mining companies, MNC Sekuritas recommends buying ANTM and INCO shares, as well as selling MDKA.

Meanwhile, Sebastian has not recommended shares of mining issuers at this time, both gold and coal producers.