Cement Stocks Outlook for the week (28.05.2012 - 01.06.2012) Stocks of major cement companies are seen trading range-bound next week amid lack of any sector-specific triggers. Investors will wait for monthly despatch data on Friday to take further view on the sector. There may be a negative bias in anticipation of price cuts by cement companies in the coming week as monsoon sets in. Construction activity in the country typically halts during the rainy season. Prices in north have declined by 5-20 rupees per (50-kg) bag led by subdued demand on account of disruption in the supply of construction materials and shortage of labour. This is rather unusual of May as usually May prices are hiked to exit at better rates so that the seasonal decline in monsoon prices are favourable to industry. Cement makers are also likely to get hit due to a sand mining ban by Punjab and Haryana from Apr 1. Post the ban supply for basic materials have come under pressure with costs of these materials (sand, gravel) escalating to almost thrice the prices seen in February.
Street is also likely to keep a close eye on the government's decision on fuel pricing. A rise in prices of diesel is viewed as negative for the sector, as it will increase the transportation cost for cement companies. Additionally, stocks of cement makers are likely to remain under pressure on expectations that the Competition Commission of India, which is investigating allegations of price rigging by companies, may announce its order soon. As such, stocks of cement companies have taken a beating. -- You received this message because you are subscribed to the Google Groups "Kences1- Rupeedesk" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/kences1?hl=en.
