Will coal shares bounce back?

The strong increase in coal prices has rekindled hopes for Vietnam’s miners and securities investors after a period of disappointment. After eight years of decline, the coal price began recovering in early 2016. Analysts commented that the coal price has been witnessing the strongest recovery compared with other types of energy. By November 2016, the coal price had increased by 112 percent compared to earlier this year. According to BIDV Securities, there are two reasons. First, in mid-2015, China created the policy of restricting the opening of coal mines for less than 273 days (the duration was 330 days in the past). The decision forced the country to increase imports, because coal accounts for 64 percent of energy consumption in China. Second, President-elect Trump’s mentioning of the policies to help better the US coal industry caused the coal price to increase sharply. The price soared by 20 percent on November 10.

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