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Profiting from coal play despite a murky future

Chloe Lim
Chloe Lim1/27/2022 09:34 PM GMT+08  • 8 min read
Profiting from coal play despite a murky future
While coal companies attempt to figure out how they can pivot to a renewable future, will investors buy into their plans?
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Good old-fashioned coal provided its investors with a windfall last year. The G20 countries may have announced in a joint communiqué last October to declare a halt to financing overseas coal projects.

But that did not stop two Singapore Exchange (SGX) listed coal stocks from posting significant gains last year. Golden Energy and Resources’ (GEAR) share price rose by 80.1% in 2021, and Geo Energy Resources surged 82% in share price alone, excluding dividends. To put this into context, GEAR and Geo Energy outperformed Bitcoin, which rose only 62% in 2021. The Straits Times Index gained a mere 9.8% last year, and the widely followed S&P 500 Index rose 26.9%.

The irony that the Group of 20 (G20) became industrialised because of coal did not escape attention. However, the trend now is to stop financing coal projects despite the fact that the funds that are financing coal projects are probably the ones likely to get a windfall, as banks have committed to stop financing new coal projects.

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