KGI Picks BANPU-PTG on Stronger Coal Demand amid Supply Shortage in Europe

KGI Securities reiterated its Overweight recommendation on the Energy sector, with Banpu Pcl. (SET: BANPU) and PTG Energy Pcl. (SET: PTG) as its top picks, as tighter coal supply due to the EU’s ban on coal imports from Russia and stronger coal demand, especially from the EU after the gas shortfall in Europe have sent coal prices higher.

Considering that the analyst expects coal prices to remain well above US$300/ton through the winter, BANPU is the Energy stock that analysts favor the most.

KGI ranks PTG as its second top pick as it anticipates rising quarterly oil consumption in Thailand as the country is open for business. KGI’s tourism analyst forecasts 11.0 million foreign travelers to the country this year and 25.0 million next year, implying stronger domestic oil consumption. 

In addition, oil marketing margin for the industry has also improved and remains at a high level after the Thai government decided to float retail diesel prices of more than THB30/liter since May this year.