Coal news and updates

The largest exchange-traded fund to specifically track coal companies has seen a surge in interest this week, following the unexpected presidential victory by Donald Trump, who has promised to “bring back coal 100%.”

 

The VanEck Vectors Coal ETF KOL, -1.51%  has been a strong performer throughout 2016, more than doubling year to date, and it jumped 2.5% on Wednesday, the first trading session following the election. Trading volume on Wednesday neared 1.9 million shares, making for one of the most active days for the fund in its history. About $14.3 million has flowed into the $113.6 million fund over the past month, according to FactSet data.

 

The ETF fell 1% to $13.73 on Thursday; it traded on volume of about 408,000 shares, well above its 30-day average of almost 250,000 shares.

 

The recent gains in the fund follow a protracted downtrend for the sector that came as alternative sources of energy—including natural gas and clean energies like wind and solar—have both dropped in price and been more widely adopted. Peabody Energy, once one of the largest players in the space, filed for bankruptcy earlier this year.

 

 

“There’s still a long-term threat from natural gas and solar, but the real killer to coal is climate change regulation, and if that’s eased, then it will be more competitive,” said Vic Sperandeo, who runs the Trader Vic Index, a long-short algorithm that has a commodities focus.

 

The platform of the Republican Party called for the Clean Power Plan to be done away with altogether, and Trump is widely expected to advocate for other environmental-related deregulation.

SOurce:Market Watch