Tuesday, April 19, 2011

Straits Asia falls on Goldman report

Stock Name: StraitsAsia
Company Name: STRAITS ASIA RESOURCES LIMITED
Research House: Golman Sachs

Shares of Singapore-listed coal miner Straits Asia Resources (STRL.SI) fell as much as 3.9% on Tuesday after Goldman Sachs added the firm to its conviction sell list and said market expectations for it were too high, traders said.

At 10:18 a.m., Straits Asia Resources shares were 2.4% lower at $2.48 with over 2.2 million shares changing hands.

Goldman said that for every 5% fall in benchmark coal prices, Straits Asia's earnings could be reduced by 11% this year and by 22% next year.
“Straits Asia is the most sensitive stock to a fall in coal prices versus its ASEAN peers,” the brokerage said, noting that the firm is the most expensive thermal coal stock in the world, trading at 19.8 times its price-earnings ratio for this year.
Goldman has a sell rating on the stock with a target price of $2.00.

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