Saudi Cement Stocks Surge on Bets Kingdom to Lift Export Banby and
Local reports spur optimism government approved cement export
Saudi Cement Index posts biggest advance since August
Saudi Arabian cement stocks jumped on optimism the government has decided to lift an export ban.
Najran Cement Co. and Al Jouf Cement Co. were the among the biggest percentage gainers in Riyadh as the country’s benchmark stock gauge climbed 1.5 percent. Customs authorities are drafting rules to regulate the export of cement and steel, Al Eqtisadiah newspaper reported. Cement producers are receiving requests from Yemeni merchants after the decision to allow exports, Ahmed Zugail, vice president of the National Committee for Cement Companies, told Al Riyadh newspaper.
Saudi Arabian cement producers have reported falling profits and rising stockpiles as the government slashes infrastructure spending amid a slump in the price of oil, which generates most of the kingdom’s income. The nation in 2012 banned cement exports in order to balance domestic supply and demand.
“Until now, reports that the ban would be lifted have been treated as rumors,” said Mohammed Alsuwayed, the Riyadh-based head of capital and money markets at Adeem Capital. Zugail’s comments “have been taken as confirmation an approval for exporting is on its way. As long and until we get the full details of the approval, including any restrictions, that could affect the rally. But this could be good for the sector,” he said.
Najran surged 10 percent and Al Jouf 9.7 percent. Saudi Cement added 5.3 percent, Yamama Cement rose 4 percent, and Southern Province Cement Co. climbed 5.5 percent. The Tadawul All Share Cement Index added 5.3 percent, the most since August.