Indonesia's Bayan debut falters as coal shares fall

Shares in Indonesian coal miner PT Bayan Resources Tbk fell 3% in their trading debut on Tuesday, hit by recent declines in the sector with coal prices tumbling 20% after peaking in July.

Bayan's $530m initial public offering, the second-biggest in the country's coal sector, has been affected by the slide in coal stocks between the pricing of the deal and the listing of Bayan's shares.

"Investors are very bearish on commodities," said Franco Sutedjowidjojo, head of research at Ciptadana Securities, adding "Bayan's timing is not right."

Bayan and other Indonesian coal firms have also been affected by problems in East Kalimantan Province, where local authorities ordered some coal firms to stop operating in areas where they lack the appropriate permits.

Bayan's shares opened flat at 5,800 rupiah, valuing Bayan at $2.1bn, and traded between an intraday high of 6,300 rupiah and a low of 5,600 rupiah. The shares traded at 5,600 by 05.40 GMT.

Bayan's listing was a stark contrast to the debut of PT Adaro Energy Tbk, Indonesia's second-biggest coal producer, which jumped as much as 60% on its first day of listing on 16 July.

Adaro raised $1.3bn in Indonesia's biggest IPO after pricing its issue lower than expected and investors had clamoured to get hold of the shares.

A coal price benchmark in Australia hit a nine-week low of $156 a ton last week, although prices rebounded slightly on Tuesday. Coal prices have taken a beating due to weak demand and a fall in oil and gas prices.

The mining sub index of Indonesia's stock exchange was down 1.6% on Tuesday and has fallen nearly a third from a record struck in late February.

Shares in PT Bumi Resources Tbk, Indonesia's biggest coal firm with a market value of about $11bn, have fallen more than 40% from a high in June.

A total of 833 million Bayan shares, including 333 million new shares and 500 million from three existing individual shareholders, were sold to investors.

Trimegah Securities Tbk was the lead manager for the offering.

Proceeds from the sale of the new shares, worth 1.93 trillion rupiah ($211m), will be used to help finance expansion. The company will not receive the funds from the sale of shares owned by existing shareholders.