Coal performs better than gold

COAL companies have posted the major gains in terms of market capitalisation during the June quarter, according to Deloitte’s Queensland Energy and Resources Index.
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Felix Resources' Ashton longwall.

Blair Price

Out of the Queensland-based companies assessed, Felix Resources led the field, increasing its market cap by $A961 million in the three-month period, followed by Macarthur Coal by $900 million, New Hope by $619 million, coal seam gas player Arrow Energy by $611 million and Whitehaven Coal by $582 million.

While gold is often touted as a safe haven during global bear markets, Australia’s second-largest gold producer, Lihir Gold, had the biggest slide of the companies on the index, losing $800 million in market cap for the quarter, proving that coal has recently been more dependable than the precious metal.

But Lihir still remains top of the ladder for total market cap, coming in at $6.94 billion for the end of June, while New Hope was second at $3.705 billion, a 20.1% jump on the March quarter.

Felix Resources was ranked third with $2.68 billion in a massive jump of 55.9% on the March quarter.

Arrow Energy was fourth with $2.54 billion while Macarthur Coal and Whitehaven Coal were fifth and sixth, rounding out the billion-dollar club with market caps of $1.618 billion and $1.234 billion respectively.

Of note, Macarthur had a 125.6% jump in market cap on the March quarter and Whitehaven lifted 89.4% in market cap in the same period.

Deloitte cited April trade data from the coal terminals at Hay Point and Dalrymple Bay, which had their largest exports since November 2008 in shipping 7.2 million tonnes from Queensland coking coal mines.

Deloitte said this was reflected in some of the impressive market cap gains posted by Felix and Macarthur.

Merger and acquisition activity also played a hand; Felix has long been subjected to speculation of a takeover from Yanzhou Coal.

Whitehaven was trying to merge with Gloucester Coal during the June quarter, but the proposal was axed after Noble Group’s $7 a share offer led to the Hong Kong-based commodities trader snaring an 87.8% stake of Gloucester.

New Hope, on the other hand, is still flying high from the $2.45 billion sale of its undeveloped New Saraji project to BHP Billiton Mitsubishi Alliance last year. One broker estimated in May the company was earning $500,000 a day in interest from its massive cash reserves.

Aside from its profitable coal operations, New Hope has made a bumper return on its 112 million Arrow Energy shares, originally purchased at 58c each and closing yesterday at $3.16.

Shares in Macarthur are up 45c this morning to $7.50, New Hope is up 6c to $4.53, Felix has gained 87c to $15.67 and Whitehaven has picked up 3c to $3.05.

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