Sakari

Sakari: is -2.7% at $1.255, on an extended decline after topping out on 6 Jul. We note that just before mid Jul, Credit Suisse had a big commodities report, in which the house cut thermal coal price assumptions for benchmark Newcastle grade to US$98/t for FY12e, US$100/t for FY13e and US$110/t for FY14e. Expects Indonesian coal companies to see ASP fall and earnings momentum to be weak starting 2Q12, with consensus downgrade to accelerate in the next few wks. Last wk, Credit Suisse reiterated this call, highlights that thermal coal prices will see the largest downward revisions, due to increased supply from the US (recall the US is seeing a lot of alternative energy supply in the form of shale gas).