A price war between Oman and the UAE is creating a rocky outlook for shares of Raysut Cement.
The Omani company plans to buy Pioneer Cement Industries, a UAE company, reportedly for about US$180 million, although a final price has yet to be announced.
But the move is "not fruitful" for Raysut, say analysts at Global Investment House (GIH) in Kuwait. GIH downgraded Raysut’s stock to "reduce" with a target price of OMR1.088.
UAE cement companies have been increasingly selling their product in Oman, said Hettish Karmani, a senior analyst for GIH.
This has driven prices down in Oman because UAE cement is cheaper.