Saudi Cement Surges on Demand, Supply Talks: Riyadh Mover
Saudi Cement Co. (SACCO) rose to the highest in more than three years after the producer of the building material said cement companies are in talks to sell as much as 600,000 tons of extra clinker supplies.
The shares advanced 1.8 percent to 84 riyals at 3:30 p.m in Riyadh, the highest close since June 2008. Southern Province Cement Co. (SOCCO), which last month posted a 52 percent gain in quarterly profit, rose 0.9 percent. The benchmark Tadawul All Share Index (SASEIDX) increased 0.4 percent to 6,758.87, the highest close in more than a year. The cement index climbed 1.3 percent, bringing this year’s advance to 7.7 percent.
Saudi Arabia’s cement makers are benefiting from increased government spending, including a $384 billion plan for infrastructure in the largest Arab economy. Cement production climbed 13 percent to 48.4 million tons last year, according to data on the website of Yamamah Saudi Cement Co. The kingdom will require cement producers to operate at full capacity to help end a supply shortage, Al-Eqtisadiah reported Feb. 4, citing an unidentified person at the Ministry of Commerce.
“Huge infrastructure projects in the kingdom are boosting demand,” said Safaa Zbib, senior research manager at Kuwait and Middle East Financial Investment Co. “Good results and dividends are the key drivers behind those stocks.”
Saudi Cement’s board last month proposed a second-half dividend of 4.5 riyals a share after paying 2 riyals for the first six months. The company paid a dividend of 4 riyals for 2010, according to data posted on the Saudi bourse website. Fourth-quarter profit surged 40 percent to 212.3 million riyals ($57 million), the company said Jan. 16.
Southern Province gained to 86.75 riyals. The company on Jan. 17 said fourth-quarter profit rose to 251 million riyals on higher sales.
To contact the reporter on this story: Zahra Hankir in Dubai at firstname.lastname@example.org
To contact the editor responsible for this story: Claudia Maedler at email@example.com