Geo Energy

Geo Energy: Shares in Geo Energy surged 18% yesterday, possibly sparked by news that ‘Investment Guru’ Jim Rogers has made his maiden direct purchase into the company, acquiring 1.7m shares at $0.355 for a total of $603,5500. The purchase resulted in a massive 152.9m shares being traded and brings his direct stake to 0.15% and indirect to 0.17% in the company. The news gels well with an outperformance by Indonesian coal stocks yesterday, buoyed by China’s HSBC PMI which hit a 4 mth high, while noteworthy that Coal prices are generally denominated in USD and a bulk of their costs are denominated in Rupuah, as such industry players could be net beneficiaries of a weakening Rupiah instead. Separately CS also highlighted that Coal stocks have performed strongly yesterday, increasing 8-17% relative to the IDX on the back of better-than expected China PMI, and IDR weakness considering that they are beneficiaries of the IDR depreciation. Overall, house still cautious about the oversupply of coal globally and expect coal prices to remain low, especially with the weak IDR/AUD in Indonesia/Australia, the major exporters of coal.