Saudi Arabia’s cement producers are beating the country’s benchmark stock index on speculation they will fare well following US$500bn in government spending and projects.
This year has seen the Tadawul All Share Cement Index, which includes nine stocks, surged 20%, the third-best performance after media and retail stocks and compared with a 7.4% fall in the Tadawul All Share Index. Cement producers offer a dividend yield of 6.6%, second only to transport companies.
“The sector will continue to benefit from large infrastructure spending under way in Saudi Arabia,” said Yong Wei Lee of Emirates NBD Asset Management in Dubai to Bloomberg.
King Abdullah announced a US$130bn plan this year to build homes and create jobs in a bid to stave off regional protests that toppled leaders in Tunisia, Egypt and more recently, Libya. The rulings are in addition to a 2010 commitment to spend US$384bn over five years on housing, transport and education.