Wednesday, January 12, 2011

Straits Asia

Straits Asia: May rise as news the coal producer has been issued the Principle Licence for the Northern Leases area of its Sebuku mine helps visibility on the Co's production ramp up plans; SAR says the licence is the precursor to the Borrow and Use Licence….

OCBC who has Buy rating and $2.89 TP, note that development is positive for grp, forming part of their expansion plans and is very much welcome. Add that the news is ‘better late than never’ as the permit had previously been expected by end-2010. In addition to today's positive update, broker notes that grp is a key beneficiary of rising thermal coal prices. Technically, YTD high of $2.74 will act as strong resistance.

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