StraitsAsia - Straits Asia donwgraded to 'sell' from 'neutral' by DMG

Stock Name: StraitsAsia
Company Name: STRAITS ASIA RESOURCES LIMITED
Research House: DMG

DMG & Partners has downgraded Singapore-listed coal miner Straits Asia Resources (STRL.SI) to “sell” from”neutral” but maintained its target price of $2.49.



DMG has cut its rating for Straits Asia Resources as it said it believes the firm’s share price has over-run following the issuance for a coal mining license in Indonesia and the recent surge in coal prices.

“We think coal prices will fall as coal output recovery in Queensland is expected to take place as soon as three months,” said DMG in a report.



However, DMG raised its 2011 earnings per share estimate by 6% to reflect a higher quarter of higher coal prices.



Shares of Straits Asia Resources have risen more than 15% since the end of last year to close at $2.88 on Wednesday.