Bumi Falls to 41-Month Low; Director Says Drop ‘Irrational’

PT Bumi Resources (BUMI), Asia’s biggest power-station coal exporter, sank to the lowest level in more than three years after posting a first-half loss and an investment company failed to repay $231 million due yesterday.

Shares of Jakarta-based Bumi sank 14.6 percent to 760 rupiah at the 4 p.m. Jakarta time close, the lowest since March 20, 2009. The drop was the biggest on the 820-member MSCI Emerging Markets Index (MXEF), which fell 0.2 percent.

Bumi shares have fallen 18 percent the past two days after the company reported Aug. 26 a first-half loss of $322 million, compared with a restated net gain of $232 million a year earlier. PT Recapital Asset Management, an investment fund management group, didn’t repay Bumi $231 million that was due Aug. 27, London-listed Bumi Plc (BUMI), which owns 29.2 percent of Bumi Resources, said in a statement today.

“The loss that they had is not what the market expected,” Fadlul Imansyah, who helps manage about $170 million at PT CIMB Principal Asset Management, said by phone from Jakarta today. “The market has very negative sentiments on this group. Once they release something negative, everybody is giving more discount to the share price.”

CIMB Group Holdings Bhd., Southeast Asia’s top-ranked investment bank, cut the stock to underperform, equivalent to sell, from neutral.

The drop is “irrational but understandable in today’s charged, speculative, wired environment and trading,” Director Dileep Srivastava said in an e-mailed response to questions today. “Our first-half results are operationally sound on sales and growth. I also suspect there may be margin calls and a higher market expectation which is proving unreal in today’s uncertain sector and economic environment.”

Coal prices at Australia’s Newcastle port, an Asian benchmark, have fallen 21 percent this year as the Chinese economy slowed and after U.S. and South African producers shifted coal sales to Asia amid a debt crisis in Europe.

Bumi has tumbled 65 percent this year, underperforming the 8.3 percent gain in the benchmark Jakarta Composite Index. (JCI)

To contact the reporters on this story: Gan Yen Kuan in Kuala Lumpur at ykgan@bloomberg.net; Yudith Ho in Jakarta at yho35@bloomberg.net

To contact the editors responsible for this story: Darren Boey at dboey@bloomberg.net; Greg Ahlstrand at gahlstrand@bloomberg.net

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