CIMB Coal Mining Sector Note - Coaltrans Conference: highlights from Day 2

Day 2 of the Coaltrans Conference reiterated the points from Day 1. There were more details on China and India's coal import growth, end-users' strategies, the demand for low-rank coal and the higher use of indexation. We expect the overhang from DMO and a new reference price to be over soon. We will be reviewing our sector weighting after the conference. We would prefer exporters on the back of the stronger momentum in export prices. Bumi would be our top pick, for its greatest leverage to coal-price movements. We also like Adaro as it should be the biggest beneficiary of consolidation.