Snowstorms spur more gains in cement stocks
Cement stocks yesterday added to the gains they made last week as investors remain convinced there will be high demand for the material for reconstruction following the devastating snowstorms.
Anhui Conch Cement surged 20.71 per cent to HK$57.70. Its A shares rose 10 per cent to 71.48 yuan.
'Analysts expected cement stocks would be welcomed by investors this week,' said material analyst Geoffrey Cheung Bik-hoi of Daiwa Institute of Research. 'Not many sectors can attract investors' attention during this volatile market.'
Shares of other cement companies, such as China National Building Material (CNBM), China National Materials (Sinoma) and TCC International Holdings, also increased more than 10 per cent yesterday.
CNBM closed 15.43 per cent higher at HK$20.80. Sinoma ended the day 19.53 per cent ahead at HK$8.57 while TCC rose 17.34 per cent to HK$6.70.
CNBM had set its sights on beating its rivals in southern China and the Huaihai area by investing 33.3 billion yuan to lift annual cement output to 174 million tonnes by next year, up from just 11 million tonnes in 2006, a senior executive said on Friday.
President Cao Jianglin said the snowstorms would benefit the company because reduced supply would push up prices, although some cement factories were forced to close due to power shortages.
Investors expect demand for cement will keep rising due to the mainland's vast infrastructure needs.
'Cement makes up 60 per cent of the overall materials used for infrastructure projects,' Mr Cao said.
The mainland produced 1.35 billion tonnes of cement last year, up 13.48 per cent from the previous year, official figures show.