Industrias CH SAB, Mexico’s largest steelmaker, surged after President Enrique Pena Nieto announced a $315 billion plan to build railways, bridges and other infrastructure.
The shares increased 3.3 percent to 84.15 pesos today in Mexico City, according to data compiled by Bloomberg. It was the biggest gainer on the country’s IPC index, which was little changed, after Kimberly-Clark de Mexico SAB.
The federal government seeks public and private investment of at least 4 trillion pesos ($315 billion) on public works through 2018, including three passenger rail lines and two urban commuter rail lines, Pena Nieto said at an event today in Mexico City. Industrias CH’s shares had lost 17 percent this year through July 12 amid reports showing declines in domestic steel demand.
“The national infrastructure plan means a lot for ports, highways, electricity plants, oil platforms,” Raul Ochoa, an analyst at Interacciones Casa de Bolsa, said in a telephone interview from Mexico City. “All of this needs steel.” The brokerage firm has a hold recommendation on Industrias CH’s shares.
Empresas ICA SAB, the nation’s biggest construction company, advanced 3.2 percent to 25.5 pesos.