June 26 (Bloomberg) -- Cementos Argos SA, Colombia’s largest cement maker, rose the most on the country’s benchmark index after Banco BTG Pactual SA said the stock may surge 36 percent over the next year as construction rebounds.
The common shares gained 3 percent to 7,550 pesos at 11:59 a.m. in Bogota, the biggest increase in three weeks on a closing basis. The benchmark Colcap index rose 0.6 percent. Medellin-based Cemargos’s shares had dropped 25 percent this year through yesterday.
Colombia’s building permits climbed 37 percent in April from a year earlier, the national statistics agency reported last week. That signals improvement for Cemargos in the second half of the year, BTG analysts Felipe Ucros, Gordon Lee, Alonso Aramburu and Juliana Aguilar wrote today in a research note. The analysts raised their recommendation to buy from neutral, with a 12-month target price of 10,300 pesos.
The surge in licenses “indicate that Colombia’s construction sector is turning a corner,” boosted by government housing programs, they wrote. Growth in the second half of this year “looks promising,” with cement volumes forecast to increase 3.5 percent, compared with a prior projection of a 2.5 percent contraction, BTG said.
Cemargos in April said gray cement sales volumes in Colombia in the first quarter fell 8.2 percent from a year earlier.
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