Yanzhou Coal Mining ADRs slide on word Chinese province will boost production, cut pricesadmin
Shares of China’s Yanzhou Coal Mining Co. trading in the U.S. helped pull an index of emerging markets ADRs down in Wednesday afternoon trading.
The company’s ADRs fell $11, or 10.3 percent, to $97.71. ADR stands for American Depositary Receipt, which is a security designed to allow U.S. investors to trade shares of companies based overseas.
The government in China’s Shandong province has moved to have mines increase production, but also lower prices, according to Goldman Sachs analyst Song Shen, who cites a government Web site.
The move is designed to ensure power plants have enough coal amid shortages of the fossil fuel as a peak usage season approaches, the analyst said.
“We believe price caps would be very difficult to roll out nationwide given the fragmented industry supply side,” Shen said in a note to clients.
Despite this latest development, Shen said he remains “very positive” on Chinese coal stocks due in part to a substantial jump in coal prices so far this year.
The Bank of New York Emerging Markets ADR Index — which includes shares of companies based in China, Mexico, Brazil and more — lost 4.66 points to 368.64. The Bank of New York Composite ADR Index fell 1.78 points to 177.91 as the U.S. markets were mixed in afternoon trading.